U.S. shares rally for a second session as MSFT climbs
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U.S. shares rally for a second session as MSFT climbs
CBS MarketWatch
U.S. shares rally for a second session as MSFT climbs
Wednesday July 2, 1:03 pm ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stocks saw gains accelerate in afternoon deals Wednesday, with buyers encouraged by an analyst upgrade of Microsoft and positive news on the factory sector.
Software and hardware issues led the charge higher among tech stocks while biotech and brokerage shares boasted the best gains in the broader market. Only airline and oil issues failed to incite buying interest.
The Dow Jones Industrial Average (CBOT^DJINews) bulked up 76 points, or 0.8 percent, to 9,117, buttressed by Microsoft, Intel, AT&T and SBC Communications.
The Nasdaq Composite (NasdaqSC^IXICNews) ran up 30 points, or 1.8 percent, to 1,670 and the Nasdaq 100 Index (NasdaqSC^NDXNews) firmed 22 points, or 1.9 percent, to 1,240.
One strategist feels equities need to correct further from current levels after their tremendous advance off the March 11 lows.
"A lot of good news has already been priced into stocks and the pace of the advance is likely to slow from here. Technical indicators suggest the market is poised for a pullback," maintained Bear Stearns strategist Francois Trahan.
He surmises the S&P 500 index could pull back to the 900 range, with the earnings backdrop likely to represent the market's biggest challenge over the near term due to overly optimistic analyst expectations.
Still, Trahan remains optimistic about the outlook for equities over the longer haul, believing that fair valuations in the marketplace will limit the downside.
The Standard & Poor's 500 Index (CBOE^SPXNews) advanced 0.8 percent while the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks sprinted 1.6 percent.
Volume registered at 719 million on the NYSE and at 997 million on the Nasdaq Stock Market. Advancers comfortably outpaced decliners by 23 to 9 on the NYSE and by 21 to 9 on the Nasdaq.
Factory orders on the mend
The latest economic news revealed a 0.4 percent gain in May factory orders, handily topping economists' projections of flat orders.
More good news surfaced in the housing market as the National Association of Home Builders projected a record 985,000 new home sales for 2003, up about 1 percent from last year's record level.
The trade group said improved consumer confidence, the income tax cut and lower interest rates are keeping buying interest brisk.
In the meantime, investors are eagerly awaiting Thursday's June employment report, which will provide clues on the long-struggling labor market. Economists surveyed by CBS MarketWatch expect a flat reading for nonfarm payrolls and are calling for an increase to 6.2 percent in the unemployment rate.
Microsoft lifts software shares
The day's main analyst action came in the shape of a Merrill Lynch upgrade of Dow component Microsoft (NasdaqNMMSFTNews) to a "buy" rating from a "neutral." Merrill cited the potential for upside in its earnings, a possible increase in Microsoft's dividend and its valuation disparity compared to peers as reason for the move. Shares of the software titan moved up 2.5 percent in recent trades. Read The Ratings Game.
Another focus in the software sector was PeopleSoft (NasdaqNMPSFTNews) , which fell 0.5 percent even after hoisting its second-quarter profit and revenue targets as it continues to fight off a hostile takeover from Oracle (NasdaqNMORCLNews) that was launched last month. PeopleSoft agreed to purchase J.D. Edwards (NasdaqNMJDECNews) a month ago. Oracle gained 1.5 percent and J.D. Edwards slumped 0.1 percent.
Retailers (CBOE^RLXNews) took heart in a 2.1 percent jump in the shares of bellwether Wal-Mart after Merrill Lynch added the Dow stock (NYSEWMTNews) to its "Focus 1" list on belief that comparable store sales should accelerate over the next four quarters as they benefit from easy comparisons.
Retailer Walgreen (NYSEWAGNews) added 0.3 percent after reporting that same-store sales jumped 10.1 percent in June. And coffee purveyor Starbucks (NasdaqNMSBUXNews) jumped 6.2 percent to reach a 52-week high after reporting late Tuesday that June same-store sales vaulted 10 percent vs. last June.
Online movie rental firm Netflix (NasdaqNMNFLXNews) raced to a 52-week high after disclosing late Tuesday that it ended the second quarter with 1.15 million subscribers compared with 670,00 in the year-ago period.
Biotech stocks benefited from a WR Hambrecht upgrade of Biogen to a "buy" rating from an "attractive." Hambrecht cited valuation and belief that near-term catalysts will drive shares of the biotech company (NasdaqNMBGENNews) , which has agreed to merge with Idec Pharmaceuticals (NasdaqNMIDPHNews) . Biogen gained 1.7 percent and Idec put on 2.4 percent.
Invitrogen Corp. (NasdaqNMIVGNNews) was another winner in the biotech sector, jumping 14 percent after disclosing it would snare privately-held Molecular Probes for $325 million in cash. The move prompted an upgrade by J.P. Morgan to an "overweight" rating from a "neutral."
On the negative side, Baxter International (NYSEBAXNews) lost 2.3 percent after disclosing it would cut 2,500 workers, or 5 percent of its workforce, which would result in a second-quarter charge totaling 30 cents a share. It backed second- quarter financial results but warned of lower growth for the full year. J.P. Morgan downgraded the stock to a "neutral" rating from an "overweight" on the back of the news.
Chip equipment stocks were decliners despite gains in the broader semiconductor group (Philadelphia^SOXXNews) . Novellus Systems (NasdaqNMNVLSNews) was among the biggest losers, sliding 1.7 percent after receiving a downgrade from J.P. Morgan to an "underweight" rating from a "neutral" due to valuation worries. Leader Applied Materials fell 0.3 percent.
Check Movers & Shakers for the latest individual stock action.
Treasurys extend losses
Government bonds took another hit but came well off earlier lows.
The 10-year Treasury note headed down 2/32 to yield (CBOE^TNXNews) 3.555 percent while the 30-year government bond shaved 5/32 to yield (CBOE^TYXNews) 4.60 percent.
In the currency sector, the U.S. dollar traded mixed against its major counterparts, shedding 0.6 percent to 118.62 yen while the euro declined 0.5 percent to $1.1512.
U.S. shares rally for a second session as MSFT climbs
Wednesday July 2, 1:03 pm ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stocks saw gains accelerate in afternoon deals Wednesday, with buyers encouraged by an analyst upgrade of Microsoft and positive news on the factory sector.
Software and hardware issues led the charge higher among tech stocks while biotech and brokerage shares boasted the best gains in the broader market. Only airline and oil issues failed to incite buying interest.
The Dow Jones Industrial Average (CBOT^DJINews) bulked up 76 points, or 0.8 percent, to 9,117, buttressed by Microsoft, Intel, AT&T and SBC Communications.
The Nasdaq Composite (NasdaqSC^IXICNews) ran up 30 points, or 1.8 percent, to 1,670 and the Nasdaq 100 Index (NasdaqSC^NDXNews) firmed 22 points, or 1.9 percent, to 1,240.
One strategist feels equities need to correct further from current levels after their tremendous advance off the March 11 lows.
"A lot of good news has already been priced into stocks and the pace of the advance is likely to slow from here. Technical indicators suggest the market is poised for a pullback," maintained Bear Stearns strategist Francois Trahan.
He surmises the S&P 500 index could pull back to the 900 range, with the earnings backdrop likely to represent the market's biggest challenge over the near term due to overly optimistic analyst expectations.
Still, Trahan remains optimistic about the outlook for equities over the longer haul, believing that fair valuations in the marketplace will limit the downside.
The Standard & Poor's 500 Index (CBOE^SPXNews) advanced 0.8 percent while the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks sprinted 1.6 percent.
Volume registered at 719 million on the NYSE and at 997 million on the Nasdaq Stock Market. Advancers comfortably outpaced decliners by 23 to 9 on the NYSE and by 21 to 9 on the Nasdaq.
Factory orders on the mend
The latest economic news revealed a 0.4 percent gain in May factory orders, handily topping economists' projections of flat orders.
More good news surfaced in the housing market as the National Association of Home Builders projected a record 985,000 new home sales for 2003, up about 1 percent from last year's record level.
The trade group said improved consumer confidence, the income tax cut and lower interest rates are keeping buying interest brisk.
In the meantime, investors are eagerly awaiting Thursday's June employment report, which will provide clues on the long-struggling labor market. Economists surveyed by CBS MarketWatch expect a flat reading for nonfarm payrolls and are calling for an increase to 6.2 percent in the unemployment rate.
Microsoft lifts software shares
The day's main analyst action came in the shape of a Merrill Lynch upgrade of Dow component Microsoft (NasdaqNMMSFTNews) to a "buy" rating from a "neutral." Merrill cited the potential for upside in its earnings, a possible increase in Microsoft's dividend and its valuation disparity compared to peers as reason for the move. Shares of the software titan moved up 2.5 percent in recent trades. Read The Ratings Game.
Another focus in the software sector was PeopleSoft (NasdaqNMPSFTNews) , which fell 0.5 percent even after hoisting its second-quarter profit and revenue targets as it continues to fight off a hostile takeover from Oracle (NasdaqNMORCLNews) that was launched last month. PeopleSoft agreed to purchase J.D. Edwards (NasdaqNMJDECNews) a month ago. Oracle gained 1.5 percent and J.D. Edwards slumped 0.1 percent.
Retailers (CBOE^RLXNews) took heart in a 2.1 percent jump in the shares of bellwether Wal-Mart after Merrill Lynch added the Dow stock (NYSEWMTNews) to its "Focus 1" list on belief that comparable store sales should accelerate over the next four quarters as they benefit from easy comparisons.
Retailer Walgreen (NYSEWAGNews) added 0.3 percent after reporting that same-store sales jumped 10.1 percent in June. And coffee purveyor Starbucks (NasdaqNMSBUXNews) jumped 6.2 percent to reach a 52-week high after reporting late Tuesday that June same-store sales vaulted 10 percent vs. last June.
Online movie rental firm Netflix (NasdaqNMNFLXNews) raced to a 52-week high after disclosing late Tuesday that it ended the second quarter with 1.15 million subscribers compared with 670,00 in the year-ago period.
Biotech stocks benefited from a WR Hambrecht upgrade of Biogen to a "buy" rating from an "attractive." Hambrecht cited valuation and belief that near-term catalysts will drive shares of the biotech company (NasdaqNMBGENNews) , which has agreed to merge with Idec Pharmaceuticals (NasdaqNMIDPHNews) . Biogen gained 1.7 percent and Idec put on 2.4 percent.
Invitrogen Corp. (NasdaqNMIVGNNews) was another winner in the biotech sector, jumping 14 percent after disclosing it would snare privately-held Molecular Probes for $325 million in cash. The move prompted an upgrade by J.P. Morgan to an "overweight" rating from a "neutral."
On the negative side, Baxter International (NYSEBAXNews) lost 2.3 percent after disclosing it would cut 2,500 workers, or 5 percent of its workforce, which would result in a second-quarter charge totaling 30 cents a share. It backed second- quarter financial results but warned of lower growth for the full year. J.P. Morgan downgraded the stock to a "neutral" rating from an "overweight" on the back of the news.
Chip equipment stocks were decliners despite gains in the broader semiconductor group (Philadelphia^SOXXNews) . Novellus Systems (NasdaqNMNVLSNews) was among the biggest losers, sliding 1.7 percent after receiving a downgrade from J.P. Morgan to an "underweight" rating from a "neutral" due to valuation worries. Leader Applied Materials fell 0.3 percent.
Check Movers & Shakers for the latest individual stock action.
Treasurys extend losses
Government bonds took another hit but came well off earlier lows.
The 10-year Treasury note headed down 2/32 to yield (CBOE^TNXNews) 3.555 percent while the 30-year government bond shaved 5/32 to yield (CBOE^TYXNews) 4.60 percent.
In the currency sector, the U.S. dollar traded mixed against its major counterparts, shedding 0.6 percent to 118.62 yen while the euro declined 0.5 percent to $1.1512.
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