Stocks Advance Despite Portugal Fears
Stocks continued to climb Thursday, boosted by gains in tech, as investors appeared to shrug off worries that Portugal may need a bailout.
The Dow Jones Industrial Average were up more than 80 points after the blue-chip index gained 67 points amid light volume in the previous session.
Among Dow components, Wal-Mart, Home Depot and Hewlett-Packard led the gainers, while Bank of America and Cisco fell.
The S&P 500 rose above the critical 1,300 level at the open, while the Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to nearly 18.
Most key S&P sectors gained, led by technology, consumer discretionary and telecom.
In Europe, Portugal’s Prime Minister Jose Socrates resigned on Wednesday after parliament rejected his government's latest austerity measures, designed to help Portugal avoid having to seek an international bailout. Many analysts believe a bailout is now inevitable.
European leaders meet in Brussels Thursday, but are not expected to endorse a full package of measures to attack the sovereign debt crisis, despite the fact that they had been expected to do so for months.
"The key at the end of the day is whether Spain comes through this,” Larry Kantor, global head of research at Barclays Capital told CNBC. Kantor expected a resolution to the crisis, but not at this week’s summit.
Moody's Investors Service downgraded debt ratings on 30 Spanish banks, mostly smaller and regional institutions. Moody's said the outlook for the banks remains weak.
Despite the negative news, stocks are moving higher, although trading has remained light for much of the week.
Unrest in the Middle East and Libya continued to support the price of U.S. light sweet crude, which rose above $105 a barrel. London Brent crude fell below $115 a barrel on concerns over the Portugese debt crisis.
Gold prices soared above $1,440 an ounce and silver rose above $37 an ounce. Both commodities hit new highs.
Meanwhile, two large 7.0-magnitude earthquakes struck near north Thailand's borderwith Myanmar and Laos, according to the U.S. Geological Survey. There was no immediate word on any casualties or damage.
On the earnings front, Best Buy shares declined even after the electronics retailer posted strong quarterly profitsthanks to a boost in its mobile business.
Conagra traded mostly flat after the food producer reported a lower quarterly profit due to rising commodity prices.
And Red Hat gained more than 15 percent after reporting a 43 percent jump in quarterly results. In addition, Baird raised its rating on the firm to "outperform" from "neutral."
Oracle and Research In Motion are slated to report earnings after-the-bell Thursday.
Caterpillar rose after the company said it would invest $5 billion in expansion of its production capacity during its analyst meeting on Wednesday. In addition, Jefferies raised its price target on the firm to $125 from $120.
On the economic front,durable goods in February fell 0.9 percent in February compared with a 3.6 percent rise in January, the Commerce Department said Thursday. Ex-transportation, durable goods fell 0.6 percent in February compared with a 3.0 percent drop in January.
Jobless claims, meanwhile, fell by 5,000 last week to 382,000, according to the Labor Department. The four-week moving average dropped to 385,250, the lowest level in more than two-and-a-half years, and the fourth week below 400,000. Economists surveyed by Reuters said claims would fall to 383,000 from 385,000, the level previously reported.
On Tap This Week:
THURSDAY: 10-year TIPS auction, money supply; after-the-bell earnings from Oracle, Research in Motion.
FRIDAY: USDA food prices outlook; GDP revision, corporate profits, and consumer sentiment.
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