Another Winning Week for Stocks
Stocks finished higher Friday amid more earnings news, as the major indexes extended their winning streak to eight weeks.
The Dow Jones industrial average gained 46.6 points, or 0.44%, to 10,600.51. The broader Standard & Poor's 500 index added 7.78 points, or 0.69%, to 1,139.83. The tech-heavy Nasdaq composite index jumped 31.38 points, or 1.49%, to 2,140.46.
The markets will be closed Monday in observance of Martin Luther King, Jr. Day. Next week's earnings calendar kicks off Tuesday with reports from blue chips such as 3M (MMM ), Citigroup (C ), General Motors (GM ), Johnson & Johnson (JNJ ), and United Technologies (UTX ).
In tech, Motorola (MOT ), Advanced Micro Devices (AMD ), Affiliated Computer Services (ACS ), and PMC-Sierra (PMCS ) report earnings after the market close Tuesday.
Other companies reporting later in the week include Lucent Technologies (LU ), JP Morgan Chase (JPM ), and Qualcomm (QCOM ) on Wednesday; and EMC (EMC ) and BellSouth (BLS ) on Thursday.
Next week's economic calendar is very light, with updates on housing starts on Wednesday, followed by initial jobless claims and leading economic indicators on Thursday.
Tech stocks, particularly communications equipment, led the way Friday after Juniper Networks (JNPR ) reported earnings per share of 4 cents, vs. 2 cents a year ago (on a GAAP basis), on 33% revenue rise. The company beat estimates and issued a rosy outlook, sparking buying in Internet and telecom-related shares.
In other earnings news Friday, General Electric (GE ), reported fourth-quarter earnings per share of 45 cents, in line with the forecast and up from 31 cents a year ago, on a 4% total revenue rise. The conglomerate sees double-digit 2004 EPS growth in nine of its 11 businesses.
Sun Microsystems (SUNW ) posted a fiscal second-quarter operating loss of 3 cents per share, vs. breakeven a year ago, on a slight revenue decline.
Abbott Laboratories (ABT ) was down after giving a forecast for 2004 that was below analysts' projection. The company reported fourth-quarter operating EPS of 65 cents, vs. 55 cents, on 14% higher worldwide sales.
Home Depot (HD ) sees 9% to 12% fiscal year 2004 sales growth, and EPS growth of 10% to 14%, excluding an estimate of impact of a change its accounting for cooperative advertising funds received from vendors. The home-improvement retailer forecast 3% to 6% higher fiscal 2004 comparable-store sales.
In economic news Friday, the University of Michigan Consumer Sentiment index was 103.2 in January, vs. December's 92.6, stronger than expected. December industrial production rose 0.1%, vs. November's 0.9%, weaker than expected. Capacity utilization was 75.8%, vs. 75.7% in November.
Treasuries turned lower in price Friday after the economic data, and the dollar moved higher against other currencies. Now Treasury market players are anticipating that the move up in the greenback will lessen further the possibility of foreign exchange intervention, and thus a lessening of foreign need for Treasuries, reports Informa/MMS. Further, as prices failed to take out key resistance levels, another round of retail profit taking surfaced.
European stock markets finished higher. London's Financial Times-Stock Exchange 100 index gained 31.8 points, or 0.71%, to 4,487.9.
In Paris, the CAC 40 added 44.83 points, or 1.24%, to 3,671.8 as the Bank of France sees economic growth accelerating. Germany's DAX index rose 42.89 points, or 1.05%, to 4,111.64 amid little news to influence the market. The euro was down against the dollar at $1.2499, as European Central bankers said the higher single currency is not desirable at this time.
Asian markets finished mixed Friday. In Japan, the Nikkei 225 index broke a three-day slide, gaining 192.05 points, or 1.8%, to close at 10,857.2. Japanese wholesale prices fell 0.7% in 2003, marking the third consecutive annual decline, but the downturn that has hurt corporate profits is easing, says the Bank of Japan.
In Hong Kong, the Hang Seng index lost 82.05 points, or 0.62%, to close at 13,167.76.