Stocks Rise Moderately, Led by Tech
Stocks strengthened in quiet pre-holiday trading as a series of strong earnings reports lifted the market, although gains were tempered by mixed economic news.
Among Dow components, Travelers, IBM and AT&T gained, while Verizon and General Electric fell.
The S&P 500 and the Nasdaq also rose. The CBOE Volatility Indexfell below 15, nearing lows from June 2007.
Most key S&P 500 sectors gained, led by technology and materials.
"After a bit of a rough start with names like Bank America , Google and Alcoa , companies are starting to come through with solid reports, as investors had expected," said Michael Sheldon, chief market strategist at RDM Financial.
More companies have been beating on the top line instead of the bottom, indicating they are still able to increase their profit margins, Sheldon said.
"There's a large debate going on about how much higher margins can go to help boost profits since we’re already at or near record levels," he added. "I think as we go along for the next couple quarters and into 2012 especially, corporate earnings will be driven by revenue growth as opposed to increases in margins."
The tech rally continued after the market closed when Appledelivered results powered by sales of iPhones and Macs that easily topped what analysts had expected.
On Thursday, Travelers soared after reporting a 30 percent jump in profitsthanks to a gain in investment income. Net profit rose to $839 million, or $1.92 a share from $647 million, or $1.25 a share, a year earlier. The insurer raised its dividend 14 percent to 41 cents a share.
Morgan Stanley jumped despite a drop in profit as its results beat expectations.
General Electric slipped despite delivering first-quarter earnings above analyst forecasts and raising its quarterly dividend by 1 cent to 15 cents, its third hike since July. The diversified manufacturer benefited from a boost in business spending. GE is a minority shareholder in CNBC.
McDonald's fell despite beating expectations on strong sales throughout all regions.
And Verizon sank despite reporting strong growth, helped by sales of the iPhone as profits fell for the wireless phone company.
In other earning news, Dow component also beat earnings estimateson both the top and bottom lines after the bell on Wednesday.
And Dupont slipped despite reporting a 27 percent rise in quarterly profits, thanks to double-digit sales growth in all of its business units.
Regional bank BB&T sank despite a 21 percent gain in profits as the bank didn't need to set aside as much money to cover loan losses. PNC Financial Services traded slightly higher, however, after reporting a 24 percent gain in profits.
In other company news, BP has filed a lawsuit against Halliburton , which cemented the blown-out well which caused the oil spill in the Gulf of Mexico, and agains the rig's owner Transocean.
In related news, the U.S. Department of Justice said BP agreed to provide $1 billion for resotration projects in the Gulf of Mexico.
And Italian carmaker Fiat has agreed to pay $1.27 billionfor another 16 percent stake in Chrysler.
The dollar traded at a three-year low against a basket of major currencies after the weak U.S. economic news was released. Gold futures hit new highs above $1,500 an ounce, as silver rallied to its highest levels since 1980.
Oil prices traded slightly lower, but at still-high levels, amid weak U.S. economic news. London Brent crude for June delivery fell below $124 a barrel, while U.S. light crude for June delivery fell to just above $111.
The Philadelphia Fed Surveysurprisingly sank in March to 18.5 from 43.4 a month ago, indicating a slowdown in Mid-Atlantic manufacturing. The index of leading indicators, however, rose 0.4 percent to 114.1 in March, according to the Conference Board. The gain was more than expected, and marked the ninth straight month of gains.
Earlier, the Labor Department reported that initial claims for unemployment fell by 13,000 to 403,000 last week from an upwardly revised level of 416,000 the week before, the Labor Department said. The government had previously reported claims were 412,000.
The four-week moving average of claims rose 2,250 to 399,000. The four-week average has now been below that level for eight weeks.
In Europe, earnings pushed stocks to a one-week high.
On Tap Next Week:
THURSDAY: Earnings from Advanced Micro and Capital One after-the-bell.
FRIDAY: Good Friday—All markets closed, banks open.
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