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Stocks Stage Another Late Rally

Robert Holmes

Stocks shook off early sluggishness and ended higher Thursday as weakness in tech giants Google (GOOG Quote) and Dell (DELL Quote) failed to keep buyers on the sidelines.

The Dow Jones Industrial Average rose 51.99 points, or 0.41%, to 12,673.68, its highest ever close. The S&P 500 added 7.70 points, or 0.54%, to 1445.94, and the Nasdaq Composite reversed losses and rose 4.45 points, or 0.18%, to 2468.38.

Roughly 2.91 billion shares changed hands on the New York Stock Exchange. Advancers beat decliners by an 8-to-3 margin. Volume on the Nasdaq reached nearly 2.22 billion shares, with winners outpacing losers 5 to 3.

The market were coming off a session in which it rallied sharply after the latest meeting of Federal Reserve policymakers. The Fed left rates unchanged and offered commentary that was considered bullish by Wall Street.

The Dow gained 98.38 points, or 0.79%, to 12,621.69, and the Nasdaq was higher by 15.29 points, or 0.62%, at 2463.93.

Ken Tower, chief market strategist with CyberTrader, said that Wednesday's move higher should have "led to a good selling opportunity" that never materialized.

"What to do now is a tougher call for shorter-term traders," said Tower. "Here we are at the top of the trading range. The small- and mid-cap stocks are breaking out, but technology is lagging."

Weighing on the tech sentiment was Google, despite a strong fourth-quarter earnings report. After the previous closing bell, the Internet search giant reported earnings of $1.03 billion, or $3.29 a share, nearly tripling the year-ago results. Revenue jumped 67% to $3.2 billion. Both earnings and sales topped estimates.

A number of firms raised their stock price targets for Google, but the stock fell $19.45, or 3.9%, to close at $481.75.

On the Dow, ExxonMobil (XOM Quote) posted a fourth-quarter profit of $10.25 billion, or $1.76 a share, compared with earnings of $10.71 billion, or $1.71 a share, a year ago. Excluding items, the company had earnings of $1.69 a share, handily beating estimates. Shares were up 98 cents, or 1.3%, to finish at $75.08.

Other oil companies reported results as well. Valero (VLO Quote) shares jumped 3.2% after the company beat fourth-quarter estimates, while Marathon Oil (MRO Quote) was also gaining ground despite reporting a drop in fourth-quarter net income.

Boston Scientific (BSX Quote) said it had fourth-quarter net income of $277 million, or 19 cents a share, falling 17% from the year-ago period. Excluding items, the company earned 20 cents a share, beating estimates, but after the company providing weak guidance, shares lost 12 cents, or 0.7%, to $18.33.

Clorox (CLX Quote) said earnings rose 16% from a year ago to beat estimates, and Celgene (CELG Quote) reported fourth-quarter results that rose nearly sixfold.

Away from earnings, Dell reversed early gains and finished down 1.7% at $23.80 after the computer maker's founder Michael Dell said he will retake the position of chief executive. Round Rock, Texas-based Dell announced that Kevin Rollins has resigned his duties as CEO and board member.

Automakers reported sales results for January. Between the two companies struggling for leadership, General Motors (GM Quote) said U.S. sales sank 19.7% for the month, while Toyota Motor (TM Quote) said sales rose 5.1% in January.

Shares of GM rose 0.6% to $33.03, and Toyota ended the session higher by 1.1%.

Elsewhere, Ford (F Quote) said U.S. sales declined 18.9%, and DaimlerChrysler (DCX Quote) said sales rose 3.2% for the month.

Ford added 2% to $8.29, and DaimlerChrysler gained 1% to $63.12.

On the economic docket, the Institute of Supply Management's manufacturing index dropped to 49.3 in January from 51.4 the previous month. The reading came in below economists' estimates of 51.7 and was the lowest level since April 2003.

Elsewhere, the Commerce Department said personal income rose 0.5% in December, matching estimates, while spending rose 0.7%, also in line with expectations. The core personal consumption expenditures (PCE) deflator rose 0.1% but came in below estimates.

Separately, the Labor Department said initial jobless claims fell by a greater-than-expected 20,000 to 307,000 last week.

Commodities were mixed. Crude oil futures lost 84 cents to close at $57.30 a barrel, and natural gas sank 14 cents to $7.53 per million British thermal units. Gold was higher by $5.10 at $663 an ounce, and silver added 15 cents at $13.72 an ounce.

Equities were stronger overseas. London's FTSE added 1.3% to 6282, and Frankfurt's Xetra DAX tacked on 0.9% at 6851. Tokyo's Nikkei rose 0.8% overnight to 17,519, and Hong Kong's Hang Seng gained 1.6% to 20,430.