Stocks Finish Higher

Traders shrugged off a report showing continued labor market weakness. The second anniversary of the September 11 attacks cast a somber tone

Stocks closed modestly higher on Thursday, the second anniversary of the September 11 terrorist attacks in the U.S. The markets shrugged off a rise in initial jobless claims.

The Dow Jones industrial average finished 39.3 points higher, or 0.42%, at 9,459.70. The broader Standard & Poor's 500 index ended up 5.5 points, or 0.54%, at 1,016.42. The tech-heavy Nasdaq composite index added 22.28 points, or 1.21%, at 1,846.09. Computer and electronic retailing, apparel retailing, application software, restaurant, and biotech stocks led the gains.

Topping economic news Thursday, initial jobless claims rose 3,000 to 422,000 for the week ending Sept. 6. The prior week's revised claims were 419,000. The four week moving average rose to 407,000, which is the highest since the end of July. Continuing claims rose 61,000 in the week ended August 30, to 3.67 million. "While below its recent peak, this series is running at some of the highest levels since the 1980's," says economic research outfit MMS International.

The July trade deficit widened to $40.3 billion in July -- in line with some analysts' estimates -- after the surprise narrowing to a revised $40.0 billion in June. Exports rose 2.0% in July, 2.4% in June, and a revised 1.5% in May.

"That's stronger than the unchanged reading we expected," says economic research outfit MMS International. Imports rose 1.6% after revised 0.3% and 0.8% gains for June and May, respectively.

Meanwhile, prices of U.S. imports rose 0.2% in August, and export prices fell 0.1%.

Lacking any major news, or trading volume, the bounce in the market was "more of a patriotic bid" than anything else, says Art Hogan, market strategist at Jefferies & Co.

After Wednesday's market close, graphics software maker Adobe Systems (ADBE ) reported better-than-expected third-quarter earnings of 27 cents per share, vs. 19 cents one year earlier, on a 12% rise in revenues. The company sees fourth quarter revenue as high as $350 million. Merrill Lynch upgraded the stock to buy from neutral. The stock ended 8.44 higher%.

Despite a Citigroup downgrade on IBM (IBM ) to underperform from in-line, the stock finished up slightly.

TriQuint Semiconductor (TQNT ) gained 20% to finish at $6.81 after raising its third quarter revenue guidance to a range of $75 million to $77 million, that's from an upper target of $74 million. The company narrowed its loss forecast to 6 cents to 8 cents, and believes that its fourth quarter revenue will be at high end of its previous guidance.

Pharmaceutical research and development company Dendreon (DNDN ) added 9%, on news that in its preclinical testing to date, data on the lead compound from its new Protease Activated Therapy therapeutic platform, CVS 10290, has demonstrated a signficiant reduction in tumor volume vs. conventional chemotherapy.

Johnson & Johnson's (JNJ ) Cordis unit reported the results of its Cypher Sirolimus-eluting Coronary Stent trials in Canada, and Europe, saying it demonstrated a reduction of restenosis rates to 5.1%, surpassing those of Sirius. The stock finished slightly higher.

Campbell Soup (CPB ) has posted fourth quarter earnings of 18 cents, vs. 13 cents (including items), on a 19% sales rise. The company expects first quarter earnings as high as 50 cents per share, and 2004 fiscal earnings of $1.58 (including items). The soupmaker ended 1.1% higher.

Southwest Airlines (LUV ) has requested the assistance of the National Mediation Board to conclude its negotiations, and to reach a new contract with the TWU Local 556, which represents its 7,200 flight attendants. The stock finished 2% higher.

Verity (VRTY ) posted first quarter earnings per share of 5 cents, vs. 4 cents on a 21% revenue rise. The company expects second quarter revenue between $27 million and $29 million, and fiscal 2004 revenue as high as $115 million. Verity shares gained 4.4%.

The week's key economic updates will be released Friday, when reports on retail sales, the University of Michigan's consumer sentiment index, and producer prices are due.

Treasury Market

Treasuries reversed course to move lower in price before the close on Thursday. "Activity was hampered by the T-note auction, which drew out a little concessionary offer in advance, while the previous day's safety premium was taken out as well," says MMS. Earlier, the second anniversary of September 11, and weaker than expected initial jobless claims helped give a solid safe-haven bid to bonds.

World Markets

European stock markets finished mixed. London's Financial Times-Stock Exchange 100 index finished down 9.9 points, or 0.23%, to 4,242.2. In Paris, the CAC 40 ended 19.54 points higher, or 0.59%, to 3,348.25. Germany's DAX index finished 29.98 points higher, or 0.85%, at 3,566.85. The death of Swedish Foreign Minister Lindh, an EMU proponent, from wounds sustained in a knife attack Wednesday, also overshadowed trading.

Asian markets finished mixed on Thursday. In Japan, the Nikkei 225 index lost 309.99 points, or 2.86%, to close at 10,546.33. A bearish mood dominated, despite a revised second quarter GDP in Japan, up to +1.0% compared to the prior quarter, the day before. "As if reflecting cautious market mood, some players even paid attention to the rumor that Tokyo area could be hit by a major earthquake sometime next week," reports MMS. Major bank stocks declined, such as Mitsubishi Tokyo FG, down 4.07%. Tech stocks fell sharply across the board, affecting companies such as Tokyo Electron, down 6.04%; Advantest, which lost 5.5%; and Nikon, down 7.25%.

In Hong Kong, the Hang Seng index added 73.21 points, or 0.68%, to close at 10,883.52.

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