Dow Soars Past 9,000 as Investors Cheer Earnings
Stocks rallied Thursday as investors shrugged off a rise in jobless claims and focused on encouraging earnings from Ford and 3M.
A third straight rise in existing-home sales also buoyed the market, helping propel the Dow Jones Industrial Averageabove the 9,000 mark for the first time since January.
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Ford posted a much smaller loss than expected and beat analyst estimatesboth on the top and bottom lines.
Dow component 3M reported a 17 percent drop in quarterly profit but reduced its loss forecastfor the year.
In the morning's economic news, jobless claims rose by 30,000to 554,000, snapping a four-week streak of declines. It was slightly higher than the 522,000 economists had expected but the total number remained below 600,000, which was encouraging. And the total number of jobless fell by 88,000 to 6.2 million.
"The [claims] number rose, but it's well within the band of expectations. It's a bit of a dampener, but it's not enough to halt the upward movement in the equity markets," Peter Kenny, managing director at Knight Equity Markets, told Reuters. "The momentum is coming on earnings, which are solidly better than expected across many sectors."
And existing-home sales rose for a third straight month, climbing 0.3 percent to a seasonally-adjusted rate of 4.89 million in June. Inventories fell 0.7 percent.
This comes after the Dow snapped a seven-session winning streakWednesday after disappointing results from Morgan Stanley and Wells Fargo.
Pockets of weakness emerged in tech, putting the Nasdaq's streak in jeopardy. The tech-heavy index has risen for 11 straight sessions, its longest such streak since 1996.
Qualcomm shares skidded after the companyraised its revenue target but reported a profit decline in an after-the-bell report Wednesday.
SanDisk exceeded estimates with its latest earnings but saw its shares tumble after its outlook disappointed the market.
EBaywas a bright light for the Nasdaq, climbing more than 8 percent after the online auctioneer beat earnings forecasts.
AT&T shares also rose after the telecom giant beat analyst estimates.
Amazonshares rose after the online marketplaceagreed to buy Zappos.com in a stock deal valued at about $807 million. Zappos sells mostly footwear but also offers some apparel.
Shares of both McDonald's and UPS slipped, even as both companies appeared to be at or above estimates. In UPS's case, it was likely because it delivered a weak outlook.
CIT Group tumbled more than 15 percent following news that sugested the lender may wind up in bankruptcy protection if future debt offerings fail to attract enough creditors.
And drugmaker Bristol-Myers Squibbis buying biotech company Medarex for $2.4 billion in cash, a 90% premium over yesterday's closing price.
Thursday is an extremely heavy day for quarterly reports, in the midst of a week that will see one third of the S&P 500 and almost half the Dow companies issue earnings.
Still to come are reports from Amazon.com, American Express, Burlington Northern, Broadcom, Chubb, Juniper Networks, KLA-Tencor, Microsoft, and Netflix, due out after the closing bell.
Still to Come:
It's a jam-packed week of earnings, with about a third of the S&P—and half the Dow—reporting.
THURSDAY: Obama town-hall meeting at 2:10pm ET; Earnings from Amazon, AmEx, Microsoft, Broadcom and Capital One after the bell
FRIDAY: Earnings from Ericsson, Ingersoll-Rand, Schlumberger; Red Hat replaces CIT in S&P 500 after the closing bell
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