Stocks Finish on a High Note
Stocks finished on a high note Wednesday as investors pounced on shares beaten down in the three-day losing streak.
Paving the way was the tech-heavy Nasdaq, which jumped 42.36 points, or 2.19%, at 1,973.11, thanks to strength in heavyweights such as Cisco Systems (CSCO ) and Intel (INTC ).
The Dow Jones industrial average finished up 111.01 points, or 1.14%, at 9,848.83, led higher by Alcoa (AA ) and Caterpillar (CAT ).
The broader Standard & Poor's 500 index added 11.99 points, or 1.15%, to 1,058.56. Gold was among the top-performing S&P 500 groups as the December futures gold price shot up $6.60 to $395 on dollar weakness. Other sectors that advanced were telecom, biotech, aluminum, and homebuilding.
Positive economic data could keep the advance going Thursday. Initial jobless claims are expected to fall 3,000 to the 345,000 level in the week ended Nov. 8. "Recent trends in initial claims are consistent with the view that the labor market has turned the corner," says MMS International, an economic research group.
The producer price index, a gauge of inflation at the wholesale level, October retail sales, and a prelimiary read on the University of Michigan consumer confidence index are due Friday.
This week's earnings are dominated by large retail chains. Due after Wednesday's close: AnnTaylor Stores (ANN ) and Medtronic (MDT ).
The low-price retailers are on deck for Thursday: Wal-Mart (WMT ), Target (TGT ), and Kohl's (KSS ) will all report.
Dell (DELL ) and Starbucks (SBUX ) will also release results Thursday.
In the tech sector, chip equipment maker Applied Materials (AMAT ) reported after Wednesday's close a profit of $15 million, or 1 cent per share, compared with a year-earlier profit of $147 million, or 9 cents per share.
Computer Sciences (CSC ) reported higher earnings on strong government sales.
After Tuesday's market close, Sycamore Networks (SCMR ) reported a net loss for the first quarter of fiscal 2004 of $12.2 million, or 5 cents per share, compared with a net loss of $17.4 million, or 7 cents per share a year ago.
In retailing, teen apparel chain Abercrombie & Fitch (ANF ), which reported after Tuesday's market close, said earnings rose to 51 cents per share, up from 48 cents a year ago.
Federated Department Stores (FD ) reported a fall in earnings per share to 36 cents, but still beat expectations.
Merck & Co. (MRK ) shares rebounded from earlier losses after the drug maker said it discontinued research on Substance P, an experimental treatment for depression after it failed in clinical trials.
Treasuries gained in price as a safety bid was rekindled via the latest bombing in Iraq, the broadening mutual fund scandal, and even episodic rumors of hedge fund liquidity problems, says MMS.
Key data are due Thursday and Friday, as well as a speech by Federal Reserve Chairman Alan Greenspan Friday.
European bourses finished higher. London's Financial Times-Stock added 26.1 points, or 0.6%, to 4,371.2, after the Bank of England raised its forecasts for both economic growth and inflation after increasing interest rates last week for the first time in nearly four years.
In Paris, the CAC 40 added 5 points, or 0.15%, to 3,411.05. Germany's DAX index gained 18.47 points, or 0.5%, to 3,748.34.
Asian markets finished mixed. Japan's Nikkei 225 index added 19.18 points, or 0.19%, to finish at 10,226.22, following Tuesday's sharp losses. The absence of strong foreign selling led the market to rebound in the morning, but the market mood was jittery, eyeing special quotation for options due Friday.
Hong Kong's Hang Seng index lost 32.14 points, or 0.27%, to 11,971.48.