Stocks End Higher
U.S. stocks pushed higher on Tuesday with the Nasdaq gaining nearly 1.5% as Wall Street shrugged off weakness in telecommunication stocks -- prompted by a profit warning from Verizon (VZ ) -- to focus on upbeat earnings news from some other big names.
The Dow Jones industrial average gained 40.63 points, or 0.43% to 9,576.04. The broader Standard & Poor's 500 index inched up 6.22 points, or 0.61%, to 1,029.04. The Nasdaq composite strengthened 27.11 points, or 1.45%, at 1,901.73. again by gains in technology issues.
As the trading day ended, Wall Streeters looked ahead to Wednesday's session when several companies are on the docket to release quarterly earnings. Among the bigger names are chipmaker Micron Technology (MU ), retailer Bed Bath & Beyond (BBY ), payroll processing outfit Paychex (PAYX ), and Darden Restaurants (DRI ), the name behind the Red Lobster and Olive Garden chains.
There are no major economic data reports before Thursday, when news on August durable goods orders and new home sales are due out.
Tuesday's advance was led by some of the Internet stocks that were badly bruised during the market downturn including retailer Amazon (AMZN ) and destination site Yahoo (YHOO ).
Lifting the mood on Wall Street were solid earnings from investment banks. Morgan Stanley (MWD ) posted third-quarter profit that more than doubled and surpassed analyst expectations, thanks to a pick-up in its equities businesses.
Rivals Goldman Sachs (GS ) and Lehman Brothers (LEH ) both also reported higher third-quarter profits, thanks to an increasing demand for fixed-income securities.
News from Verizon that its 2003 earnings would fall short of Wall Street estimates, however, hurt Dow member AT&T (T ).
In other equities news, drug maker Eli Lilly (LLY ) announced it sees meeting its third-quarter and full-year 2003 earnings targets.
Discount retailer Target (TGT ) said sales last week and in the month to date at its stores open at least a year came in line with its forecast, thanks to demand for stationery, holiday goods and other items.
AutoZone (AZO ), the largest U.S. auto parts retailer, posted higher fourth-quarter earnings, exceeding Wall Street estimates. The performance came as a result of cost controls and more sales to car repair centers.
Tyson (TSN ), the largest U.S. meat processor, announced it sees profits in its September quarter to surpass Wall Street estimates by at least 40% thanks to a U.S. ban on Canadian beef that increased demand for its meat.
The market did not appear to react to a President Bush's before the United Nations in which he urged member countries to back the U.S. transition plan to democratic rule in Iraq.
Treasuries recovered to end higher as traders reckoned that Monday's declines in bonds due to a sharp fall in the dollar were overdone, MMS says.
In Federal Reserve news, Richmond Fed President Alfred Broaddus agreed with his Fed peers that consensus (higher) U.S. economic forecasts are quite plausible, but he warned that job market slack might still linger through the end of 2004. He noted that the weak jobs market "poses the biggest downside risk to the U.S. economy."
Instinet Redbook says chain store sales fell 1.3% for the first three weeks of September versus August, according to MMS. The year over year sales momentum slowed to a 3.2% pace. Hurricane Isabel was noted as a main cause for the soft sales in the most recent week, MMS says. Severe weather closed stores on the East Coast, while shoppers stocked up on food, water, and other essentials but avoided the "big ticket" purchases.
European stock markets closed lower.
London's Financial Times-Stock Exchange 100 index lost 6.50 points, or 0.15%, to 4,221.70.
In Paris, the CAC 40 lost 16.91 points, or 0.52%, to 3,266.04, as French consumer spending contracted 2.7% in August, the largest slide in 7 years. At same time, French consumer prices rose 0.3% in August.
Germany's DAX index fell 45.25 points, or 1.31%, at 3,411.02 as there was reaction to a report German construction sales fell in July.
In Asia, Japan's stock market was closed on Tuesday for Autumnal Equinox Day, a national holiday. In Hong Kong, the Hang Seng index gained 71.09 points, or 0.65%, to finish at 10,944.36.