business

Stocks Finish Sharply Higher

Investors were in a buying mood despite record oil prices and news that Google cut its IPO price

Stocks rallied into the close of the session Wednesday -- with the Dow average moving firmly back above the key 10,000 mark --led by a broad advance in technology, telecom, and biotech issues. Some upside likely came from short covering as indexes continued higher for the fourth straight day, as investors brushed aside fresh record oil prices and news that Google reduced its initial public offering price.

The Dow Jones industrial average jumped 110.32 points, or 1.11%, to 10,083.15. The broader Standard & Poor's 500 index added 13.46 points, or 1.24%, to 1,095.17. The tech-heavy Nasdaq composite index climbed 36.12 points, or 2.01%, to 1,831.37.

In the energy markets, September West Texas Intermediate crude finished the Nymex session at record closing levels of $47.20 per barrel, up 45 cents on the day, after ranging between $47.30 and $46.50. OPEC raised its 2004 demand forecast, while fear persists that Russian refiner Yukos will go bankrupt. Weekly data show oil and gasoline inventories tightened, and there were reports that Shi'ite cleric Muqtada al-Sadr accepted a peace plan and agreed to lay down arms in Iraq.

Still, speculation began to build that stocks have digested even a potential jump in oil to $50, says Standard & Poor's MarketScope.

Google cut its offering price to between $85 and $95 per share from between $108 and $135. The search engine company also said shareholders slashed the number of shares they planned to sell to 5.5 million from about 11.6 million. Google still plans to sell about 14.1 million shares to the public, according to news reports.

Google is expected to begin trading Thursday under the ticker GOOG.

Early in the Wednesday's session, the move by Google raised concern over the valuations of peers Yahoo! (YHOO ) and eBay (EBAY ), but the negative sentiment faded as the day progressed.

Instead, investors cheered some positive earnings news in the tech sector. Semiconductor equipment stocks were higher after Applied Materials (AMAT ) reported results after the market close Tuesday. The chip equipment maker posted third-quarter earnings per share of 26 cents, vs. a loss of 2 cents a year ago, a penny above the consensus estimate. Sales in the quarter rose to $2.24 billion from $1.1 billion a year ago. And new orders rose 11% from the second quarter to $2.46 billion. The company also suggested that fourth-quarter EPS would be in a range of 24 cents to 26 cents.

Network Appliance (NTAP ) reported first-quarter earnings per share (on a GAAP basis) of 13 cents, vs. 8 cents a year ago, on a 38% total revenue rise. The company reportedly sees second-quarter EPS of 13 cents to 14 cents. The shares rose.

Harman International (HAR ) shares jumped after the audio and video components maker reported a 42% jump in fourth-quarter profit.

Economic reports due Thursday include weekly jobless claims, leading indicators, and the Philadelphia Fed index that measures factory activity in the area.

Companies on Thursday's earnings calendar include retailers Gap (GPS ), Nordstrom (JWN ), and Limited Brands (LTD ), as well as tech outfits Autodesk (ADSK ), Novell (NOVL ), and Ciena (CIEN ).

Treasury Market

Treasuries ended lower in price as oil, stocks, and technical factors dictated market action Wednesday. The yield on the benchmark 10-year note initially moved to 4-month lows -- below 4.16% -- before rebounding through 4.20%, says economic research outfit Action Economics.

World Markets

European stock markets finished mixed on Wednesday amid higher oil prices. London's Financial Times-Stock Exchange 100 index was down 3.5 points, or 0.08%, to 4,355.2. There was little reaction to report Bank of England policy makers voted unanimously to raise the key interest rate this month.

Germany's DAX index rose 20.77 points, or 0.56%, to 3,726.5. Stocks got some support from a report Eurozone CPI fell 0.2% in July.

In Paris, the CAC 40 index added 8.35 points, or 0.24%, to 3,541.48. Government officials say the persistent rise in oil prices could slow the French economy. In Asia, the markets finished mixed on Wednesday. Japan's Nikkei 225 index gained 48.29 points, or 0.45%, to close at 10,774.26. Semiconductor-related shares drove Japan's Nikkei higher after Applied Materials said chipmakers are increasing orders for its equipment. Advantest led the gains.

In Hong Kong, the Hang Seng index lost 27.58 points, or -0.23%, to close at 12,228.54, weighed down by strong oil prices. Upcoming earnings announcements by several blue-chip companies also kept investors at bay, says Standard & Poor's MarketScope.

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