Stocks Finish Solidly Higher
Stocks finished firmly higher Thursday. Market sentiment was boosted by signs of easing geopolitical tension. Investors also mulled mixed economic data in a moderately brisk trading session.
The Dow Jones industrial average was up 78.01 points, or 1%, to 7,884.99. The broader Standard & Poor's 500-stock index gained 9.73 points, or 1.18%, to 837.28. Meanwhile, the tech-laden Nasdaq composite index rose 20.28 points, or 1.56%, to 1,323.96.
Major indexes jumped on reports that Iraq agreed to destroy Al Samoud missiles, which were declared in violation of U.N. regulations. Also, reports that the U.S. would lower the terror alert level from orange to yellow raised investor sentiment.
In a speech Wednesday evening, President Bush outlined plans for the Middle East after a possible war in Iraq. Meanwhile, North Korea restarted a reactor at its main nuclear complex.
Thursday brought a mixed bag of economic data. January durable goods orders jumped 3.3% from a revised 0.4% dip in December, suggesting that companies are buying more equipment. However, initial jobless claims for the week ended Feb. 22 rose 11,000 to 417,000. The four-week moving average rose to 399,750.
In other downbeat economic news, new home sales dropped 15.1% to 914,000 in January. "The decline is much greater than expected, but sales have been on a record pace for months," notes economic research firm MMS International.
Energy company American Electric Power (AEP ) cut its 2003 earnings outlook, but said it would issue 50 million shares to bolster its balance sheet. AEP's stock price advanced 3.7% Thursday.
Telecommunications equipment company Lucent (LU ) announced Thursday that it settled a Securities and Exchange Commission investigation, which began over two years ago.
Shares in the world's largest drugmaker, Pfizer (PFE ), rose Thursday, after the European Commission granted approval of its $56 billion acquisition of competitor Pharmacia (PHA ).
On the earnings front, cable provider Comcast (CMCSA ) reported a fourth quarter loss of 3 cents a share, vs. a 24 cents per share loss last year.
Top executives at the Argentina unit of troubled Dutch grocer Royal Ahold (AHO ) resigned Thursday. But the company said it had completed an investigation of the unit without finding anything that would impact earnings. The news lifted shares almost 20% Thursday. Still, the company's stock price has plummeted more than 60% since Monday, when Ahold revealed accounting irregularities that sparked investigations by the SEC and the Justice Dept.
In commodities news, crude oil futures flirted with the $40 a barrel mark Thursday morning, but fell back in the afternoon to $36.87. Oil prices had spiked to 12-year highs on supply concerns, exacerbated by a cold winter in parts of the U.S., a general strike in Venezuela, and fears of war in Iraq.
And Enron was back in the news. A U.S. bankruptcy judge rejected an attempt by Enron shareholders to increase the liability of Citigroup, J.P. Morgan Chase, and other banks sued over the collapse of the bankrupt energy company.
Treasuries recovered into the close to finish a choppy Thursday session marginally higher. Month-end demand gave longer-dated bond issues a boost and was the catalyst for a late turnaround in prices. The benchmark 10-year note's yield was 3.74%.
European markets finished Thursday's session mixed. In London, the FTSE 100 index was down 23.4 points, or 0.65%, to 3,569.9. In Paris, the CAC 40 index gained 57.23 points, or 2.15%, to 2,715.8. In Frankfurt, the DAX index rose 63.02 points, or 2.57%, to 2,513.22.
In Asia, stocks finished higher. In Japan, the Nikkei 225 index ticked ahead 2.57 points, or 0.03%, to close at 8,359.38. Hong Kong's benchmark Hang Seng index gained 17.96 points, or 0.2%, to close at 9,134.24.