Dow Jumps Over 100 Points; HP Skids
Stocks rallied, with the Dow jumping over 100 points, after a rocky start as investors digested a disappointing read on consumer sentiment and a better-than-expected report on GDP growth.
The Dow Jones Industrial Average was up more than 100 points, after struggling along the 10,000 line earlier. This came after the blue-chip index lost nearly 75 points in the previous session and logged its first finish below 10,000 since early July.
Hewlett Packard fell after the company raised its bid for 3Par to $30 a share, trumping the latest offer from Dell . 3Par shares soared.
Boeing skidded after the aerospace giant once again delayed delivery of its first 787 Dreamliner by several weeks, citing a delay in the availability of a Rolls-Royce engine needed for the final phase of flight testing.
Intel shares rebounded after an initial drop after the chip giant warned that third-quarter earnings would likely fall short of expectations amid weak PC demand in "mature markets."
The University of Michigan and Reuters reported their gauge of consumer sentiment rose to 68.9in a final August reading from 67.8 in July but still came as a disappointment as economists had expected the gauge to rise to 69.6.
Second-quarter gross domestic product rose at a 1.6 percent rate, a downward revision from the previously reported 2.4 percent but ahead of the 1.3 percent economists had expected.
"The GDP figure is more demoralizing than frightening," said Todd Schoenberger, managing director at LandColt Trading. "Despite $1 trillion in stimulus and a fed funds rate at zero, the country continues to grow at a snail's pace. The Fed may have only one more ultra-quantitative easing package remaining in its bag of tricks, but won't do anything until the final revision is released next month," he said.
Fed Chairman Ben Bernanke said the Fed is ready to do what it has to help strengthen the recovery but, as expected, offered little in the way of specific actions the Fed was planning. The Fed chairman was speaking at the Fed's annual symposium on the economy in Jackson Hole, Wyoming.
As the debate about a possible double-dip continues, St. Louis Fed President James Bullard conceded that economic growth has slowed but said he doesn't see a double dip— he thinks growth will steady towards the end of the year and get back to normal in 2011.
Another recall from Toyota: The automaker said it will recall 1.3 million Corolla and Matrix cars in the U.S. and Canada due to a defect with engine controls that causes the cars to stall.
Tiffany shares fell despite a solid earnings report from the high-end jeweler and an upbeat outlook.
J.Crew shares also fell after earnings.
Novell shares were also slightly lower, after it reported a nearly 6 percent drop in third-quarter profit. And investor Carl Icahn increased his stake in Motorola to 10.4 percent.
Elsewhere, OmniVision Technologies swung to a quarterly profit that beat analyst estimates but revenue hit the low end of the company estimates.
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