Stocks Up; GE Brings Life to Dow
Enviado: 11/7/2003 18:23Friday, July 11, 2003 12:57 p.m. ET
By Elizabeth Lazarowitz
NEW YORK (Reuters) - U.S. stocks held strong gains in midday trading on Friday as investors took a rosy view of quarterly results from companies like General Electric Inc. <GE.N> and used a pullback in recent sessions as an opportunity to snap up shares.
GE was holding onto a slim gain after it cut the top end of its 2003 profit forecast and posted a 14 percent drop in second-quarter earnings, but its chairman said earnings would rise between 3 and 7 percent this year.
"GE earnings came out as expected. Wall Street was starting to get disappointed about earnings and GE helped reinforce some confidence," said Jack Bouroudjian, independent trader at Chicago Mercantile Exchange.
Investors have been betting that the second-quarter earnings season will bring good news about corporate profit picture, and that sentiment emerged again as they braced for reports from tech bellwethers like Intel Corp. <INTC.O>, International Business Machines Corp. <IBM.N> and Microsoft Corp. <MSFT.O>.
"We're headed toward a really big earnings week and my guess is you've got hedge fund and portfolio managers positioning themselves this week," said Hugh Johnson, chief investment officer at First Albany Corp.
But concerns that stocks are "arguably overvalued" should keep investors' enthusiasm in check, Johnson added.
The market had tumbled sharply on Thursday as worries resurfaced that the market had run too far, too fast. The Standard & Poor's 500 index <.SPX> is up well over 20 percent since hitting its 2003 low on March 11 after a rally fueled by hopes for a rebound in the economy and corporate profits.
The Dow Jones industrial average <.DJI> was up 91 points, or 1.01 percent, at 9,127. The broader Standard & Poor's 500 Index <.SPX> was up 10 points, or 1.03 percent, at 999. The technology-laced Nasdaq Composite Index <.IXIC> was up 18 points, or 1.05 percent, at 1,734.
GE was the second-most actively traded issue on the New York Stock Exchange, up 13 cents at $28.32.
Home Depot Inc. <HD.N> also strengthened the Dow Jones industrial average <.DJI>, rising 94 cents to $33.37, after Banc of America raised its rating on the stock of the world's largest home improvement retailer to "buy" from "neutral."
Hewlett-Packard <HPQ.N>, another Dow component, gained 54 cents to $22.59 after Prudential started coverage of the company with a "buy" rating.
No. 2 network gear maker Juniper Networks Inc. <JNPR.O> posted a quarterly net profit that more than doubled from a year earlier, topping its outlook as demand for broadband products and services improved. It also forecast better current quarter results than Wall Street analysts had been expecting.
Its shares were up 1 cent at $14.12.
Before the opening bell, the market got some sobering news with the unexpected decline in the core Producer Price Index, which excludes volatile food and energy prices, for June. Core PPI fell 0.1 percent, contrary to a forecast for a rise of 0.1 percent, according to economists polled by Reuters.
A drop in core PPI stirs concerns about deflation, a broad decline in prices that can erode corporate profits.
The overall U.S. PPI for June rose 0.5 percent, above expectations for a gain of 0.2 percent. (Additional reporting by Doris Frankel)
Copyright © 2003 Reuters Limited.
By Elizabeth Lazarowitz
NEW YORK (Reuters) - U.S. stocks held strong gains in midday trading on Friday as investors took a rosy view of quarterly results from companies like General Electric Inc. <GE.N> and used a pullback in recent sessions as an opportunity to snap up shares.
GE was holding onto a slim gain after it cut the top end of its 2003 profit forecast and posted a 14 percent drop in second-quarter earnings, but its chairman said earnings would rise between 3 and 7 percent this year.
"GE earnings came out as expected. Wall Street was starting to get disappointed about earnings and GE helped reinforce some confidence," said Jack Bouroudjian, independent trader at Chicago Mercantile Exchange.
Investors have been betting that the second-quarter earnings season will bring good news about corporate profit picture, and that sentiment emerged again as they braced for reports from tech bellwethers like Intel Corp. <INTC.O>, International Business Machines Corp. <IBM.N> and Microsoft Corp. <MSFT.O>.
"We're headed toward a really big earnings week and my guess is you've got hedge fund and portfolio managers positioning themselves this week," said Hugh Johnson, chief investment officer at First Albany Corp.
But concerns that stocks are "arguably overvalued" should keep investors' enthusiasm in check, Johnson added.
The market had tumbled sharply on Thursday as worries resurfaced that the market had run too far, too fast. The Standard & Poor's 500 index <.SPX> is up well over 20 percent since hitting its 2003 low on March 11 after a rally fueled by hopes for a rebound in the economy and corporate profits.
The Dow Jones industrial average <.DJI> was up 91 points, or 1.01 percent, at 9,127. The broader Standard & Poor's 500 Index <.SPX> was up 10 points, or 1.03 percent, at 999. The technology-laced Nasdaq Composite Index <.IXIC> was up 18 points, or 1.05 percent, at 1,734.
GE was the second-most actively traded issue on the New York Stock Exchange, up 13 cents at $28.32.
Home Depot Inc. <HD.N> also strengthened the Dow Jones industrial average <.DJI>, rising 94 cents to $33.37, after Banc of America raised its rating on the stock of the world's largest home improvement retailer to "buy" from "neutral."
Hewlett-Packard <HPQ.N>, another Dow component, gained 54 cents to $22.59 after Prudential started coverage of the company with a "buy" rating.
No. 2 network gear maker Juniper Networks Inc. <JNPR.O> posted a quarterly net profit that more than doubled from a year earlier, topping its outlook as demand for broadband products and services improved. It also forecast better current quarter results than Wall Street analysts had been expecting.
Its shares were up 1 cent at $14.12.
Before the opening bell, the market got some sobering news with the unexpected decline in the core Producer Price Index, which excludes volatile food and energy prices, for June. Core PPI fell 0.1 percent, contrary to a forecast for a rise of 0.1 percent, according to economists polled by Reuters.
A drop in core PPI stirs concerns about deflation, a broad decline in prices that can erode corporate profits.
The overall U.S. PPI for June rose 0.5 percent, above expectations for a gain of 0.2 percent. (Additional reporting by Doris Frankel)
Copyright © 2003 Reuters Limited.