U.S. stocks excited by rosy outlook
Enviado: 24/7/2003 17:38CBS MarketWatch
U.S. stocks excited by rosy outlook
Thursday July 24, 12:09 pm ET
By Rex Nutting
WASHINGTON (CBS.MW) -- U.S. stocks climbed higher Thursday on the strength of healthy second-quarter profits and a rosier outlook for the economy.
Markets on both sides of the Atlantic gained as multinationals like AstraZeneca, Siemens, DaimlerChrysler, Lockheed Martin and Raytheon said they see signs of better sales in the third and fourth quarters.
The latest report on layoffs also fueled the enthusiasm. The Labor Department said weekly jobless claims dropped to a five-month low of 386,000. But economists caution that the numbers are nearly impossible to interpret this time of year.
In mid-day trades, the Dow Jones Industrial Average (CBOT^DJINews) gained 52 points or 0.6 percent to 9,247. The Nasdaq (NasdaqSC^IXICNews) rose 14 points or 0.8 percent at 1,733. The broad S&P 500 (CBOE^SPXNews) rose 7 points or 0.7 percent to 996.
The Russell 2000 index (CBOE^RUTNews) of small companies rose 0.8 percent.
Most industry sectors were higher, led by Internet, oil services, networking, technology companies and brokerages. Gold and paper stocks were lower.
Advancing shares outpaced declining stocks about 2 to 1 on the New York Stock Exchange and the Nasdaq.
Volume was strong at 690 million on the NYSE and 858 million on the Nasdaq.
Dozens of large companies were announcing quarterly profit and loss numbers on Thursday, including AT&T, Biogen, Bristol-Myers Squibb, DaimlerChrysler, Dow Chemical, EBay, Eli Lilly, Lockheed Martin, Nortel, SBC Communications and Viacom.
Twenty-six of the 30 Dow stocks were higher, led by AT&T, which rose 5 percent to $20.46. Ma Bell (NYSETNews) added to the bullish sentiment, despite disappointing earnings, saying it would raise its dividend and buy back more shares.
Earnings reports
In general, earnings were exceeding analysts' estimates.
Viacom (NYSEVIANews) (NYSEVIANews) said it would begin paying a dividend to both Class A and Class B shareholders. Its operating income rose 12 percent to $1.32 billion. The media company earned $659.6 million, or 37 cents a share, a penny ahead of estimates. Shares gained $1.57 to $44.52.
Revenue fell 6 percent at Dow component SBC Communications (NYSESBCNews) , but the telecom giant managed to increase earnings to $1.4 billion or 42 cents, a penny ahead of estimates. Shares were down 49 cents to $23.483.
Another Dow component, International Paper (NYSEIPNews) , said it earned 19 cents a share while revenue dropped 1.6 percent to $6.2 billion. Shares fell 23 cents to $38.35.
Drug maker Bristol-Myers Squibb (NYSEBMYNews) earned 45 cents a share, handily beating estimates of 38 cents. Rival Eli Lilly (NYSELLYNews) earned 64 cents a share, 3 cents more than expected, while growing revenue by 11 percent. Shares rose 90 cents to $26.77.
Lockheed Martin (NYSELMTNews) boosted revenues by 23 percent and raised its outlook for the rest of the year. Shares tumbled 1.4 percent Raytheon (NYSERTNNews) , another defense contractor, said it expects its defense sales to increase as much as 9 percent this year. Shares were off 1.5 percent.
Biogen (NasdaqNMBGENNews) reported a 33 percent jump in second-quarter earnings, and exceeded estimates by 2 cents a share. But Biogen and Elan (NYSEELNNews) said trials for their drug for Crohn's disease were disappointing. Elan shares plunged 26 percent while Biogen sank 5 percent.
Among the biggest movers, Computer Associates (NYSECANews) rose 13 percent, Silicon Storage Technology rose 23 percent, and Veritas Software (NasdaqNMVRTSNews) gained 13 percent after reporting better-than-expected earnings. NetIQ (NasdaqNMNTIQNews) sank 33 percent on heavy volume after two rating downgrades.
Symantec (NasdaqNMSYMCNews) gained 12 percent after raising revenue and earnings.
Big picture
Earnings for the S&P 500 companies should strengthen in the next few quarters, said Steve Wieting, an economist at Citigroup Global Markets.
In a note to clients on Thursday, Wieting raised his estimate of 2003 earnings to $53 a share from $52.15 and 2004 earnings to $58.40 from $57.75.
"We believe the factors that slowed growth over most of the first half will boost economic activity considerably by the third quarter," Wieting wrote. For 2004, Citigroup sees the U.S. economy growing 4.2 percent, Europe growing 1.9 percent and Japan growing 0.5 percent.
Other markets
A drop in weekly first-time jobless claims to a five-month low of 386,000 sent Treasury prices lower Thursday.
The benchmark 10-year note was last yielding (CBOE^TNXNews) 4.19 percent, down 20/32. See Bond Report .
The closely watched four-week average for initial claims fell to a four-month low of 419,250, down 5,500. The four-week average has been above the 400,000 level for 21 weeks, which means job destruction is still outpacing job growth. Economists say seasonal factors in June and July make the weekly claims data almost meaningless.
Federal Reserve Chairman Alan Greenspan told Congress a week ago that the state of the labor market would remain murky until the August data are released.
Exchange rates were stable. The euro fell 0.2 percent to $1.1469, while the dollar gained 0.3 percent to 119.08 yen.
Crude oil futures rose 24 cents to $29.91. Gold futures eased $1.10 to $357.50.
U.S. stocks excited by rosy outlook
Thursday July 24, 12:09 pm ET
By Rex Nutting
WASHINGTON (CBS.MW) -- U.S. stocks climbed higher Thursday on the strength of healthy second-quarter profits and a rosier outlook for the economy.
Markets on both sides of the Atlantic gained as multinationals like AstraZeneca, Siemens, DaimlerChrysler, Lockheed Martin and Raytheon said they see signs of better sales in the third and fourth quarters.
The latest report on layoffs also fueled the enthusiasm. The Labor Department said weekly jobless claims dropped to a five-month low of 386,000. But economists caution that the numbers are nearly impossible to interpret this time of year.
In mid-day trades, the Dow Jones Industrial Average (CBOT^DJINews) gained 52 points or 0.6 percent to 9,247. The Nasdaq (NasdaqSC^IXICNews) rose 14 points or 0.8 percent at 1,733. The broad S&P 500 (CBOE^SPXNews) rose 7 points or 0.7 percent to 996.
The Russell 2000 index (CBOE^RUTNews) of small companies rose 0.8 percent.
Most industry sectors were higher, led by Internet, oil services, networking, technology companies and brokerages. Gold and paper stocks were lower.
Advancing shares outpaced declining stocks about 2 to 1 on the New York Stock Exchange and the Nasdaq.
Volume was strong at 690 million on the NYSE and 858 million on the Nasdaq.
Dozens of large companies were announcing quarterly profit and loss numbers on Thursday, including AT&T, Biogen, Bristol-Myers Squibb, DaimlerChrysler, Dow Chemical, EBay, Eli Lilly, Lockheed Martin, Nortel, SBC Communications and Viacom.
Twenty-six of the 30 Dow stocks were higher, led by AT&T, which rose 5 percent to $20.46. Ma Bell (NYSETNews) added to the bullish sentiment, despite disappointing earnings, saying it would raise its dividend and buy back more shares.
Earnings reports
In general, earnings were exceeding analysts' estimates.
Viacom (NYSEVIANews) (NYSEVIANews) said it would begin paying a dividend to both Class A and Class B shareholders. Its operating income rose 12 percent to $1.32 billion. The media company earned $659.6 million, or 37 cents a share, a penny ahead of estimates. Shares gained $1.57 to $44.52.
Revenue fell 6 percent at Dow component SBC Communications (NYSESBCNews) , but the telecom giant managed to increase earnings to $1.4 billion or 42 cents, a penny ahead of estimates. Shares were down 49 cents to $23.483.
Another Dow component, International Paper (NYSEIPNews) , said it earned 19 cents a share while revenue dropped 1.6 percent to $6.2 billion. Shares fell 23 cents to $38.35.
Drug maker Bristol-Myers Squibb (NYSEBMYNews) earned 45 cents a share, handily beating estimates of 38 cents. Rival Eli Lilly (NYSELLYNews) earned 64 cents a share, 3 cents more than expected, while growing revenue by 11 percent. Shares rose 90 cents to $26.77.
Lockheed Martin (NYSELMTNews) boosted revenues by 23 percent and raised its outlook for the rest of the year. Shares tumbled 1.4 percent Raytheon (NYSERTNNews) , another defense contractor, said it expects its defense sales to increase as much as 9 percent this year. Shares were off 1.5 percent.
Biogen (NasdaqNMBGENNews) reported a 33 percent jump in second-quarter earnings, and exceeded estimates by 2 cents a share. But Biogen and Elan (NYSEELNNews) said trials for their drug for Crohn's disease were disappointing. Elan shares plunged 26 percent while Biogen sank 5 percent.
Among the biggest movers, Computer Associates (NYSECANews) rose 13 percent, Silicon Storage Technology rose 23 percent, and Veritas Software (NasdaqNMVRTSNews) gained 13 percent after reporting better-than-expected earnings. NetIQ (NasdaqNMNTIQNews) sank 33 percent on heavy volume after two rating downgrades.
Symantec (NasdaqNMSYMCNews) gained 12 percent after raising revenue and earnings.
Big picture
Earnings for the S&P 500 companies should strengthen in the next few quarters, said Steve Wieting, an economist at Citigroup Global Markets.
In a note to clients on Thursday, Wieting raised his estimate of 2003 earnings to $53 a share from $52.15 and 2004 earnings to $58.40 from $57.75.
"We believe the factors that slowed growth over most of the first half will boost economic activity considerably by the third quarter," Wieting wrote. For 2004, Citigroup sees the U.S. economy growing 4.2 percent, Europe growing 1.9 percent and Japan growing 0.5 percent.
Other markets
A drop in weekly first-time jobless claims to a five-month low of 386,000 sent Treasury prices lower Thursday.
The benchmark 10-year note was last yielding (CBOE^TNXNews) 4.19 percent, down 20/32. See Bond Report .
The closely watched four-week average for initial claims fell to a four-month low of 419,250, down 5,500. The four-week average has been above the 400,000 level for 21 weeks, which means job destruction is still outpacing job growth. Economists say seasonal factors in June and July make the weekly claims data almost meaningless.
Federal Reserve Chairman Alan Greenspan told Congress a week ago that the state of the labor market would remain murky until the August data are released.
Exchange rates were stable. The euro fell 0.2 percent to $1.1469, while the dollar gained 0.3 percent to 119.08 yen.
Crude oil futures rose 24 cents to $29.91. Gold futures eased $1.10 to $357.50.