Updated from 4:13 p.m. EST
Stocks spent much of the day just slightly positive, but traders stepped on the gas late in the session and sent the
Dow Jones Industrial Average
to its best close since June 2001.
The Dow rose 61.71 points, or 0.56%, to 11,120.68. At the end of the day, 19 of the Dow's 30 components finished higher, led by a surge of more than 7% in
gained 9.38 points, or 0.73%, to 1289.38, and the
added 18.20 points, or 0.8%, to 2294.63.
Broad equity averages had been muted before the afternoon push began as investors dealt with firming oil prices and another day of testimony from new
Chairman Ben Bernanke.
"Investors made it through another day of Bernanke testimony,
and are now left to debate the near-term direction of the market," said Michael Sheldon, chief market analyst with Spencer Clarke LLC. "It's become clear Bernanke is concerned about the potential for higher inflation rates."
About 1.66 billion shares changed hands on the
New York Stock Exchange
, with advancers beating decliners by a 6-to-5 margin. Volume on the Nasdaq was 1.98 billion shares, and three stocks rose for every two that fell.
The 10-year Treasury was up 3/32 in price to yield 4.59% -- 10 basis points below the two-year note -- while the dollar rose against the yen and euro.
On the economic docket, the Commerce Department said new U.S. housing starts jumped 14.5% in January to an annualized rate of 2.28 million units, the highest rate since March 1973. December's housing starts were revised up to 1.99 million from 1.93 million.
"This hugely strong report will doubtless be cited as evidence that the housing market is not slowing," said Ian Shepherdson, chief economist with High Frequency Economics. "However, the extremely warm January weather surely distorted these data, just as it boosted retail sales and depressed industrial production."
Meanwhile, the Labor Department said import prices rose 1.3% in January, higher than expectations. Separately, the Labor Department said initial jobless claims rose by 19,000 to 297,000, also greater than forecast.
Also, the latest reading on the Philadelphia Fed index came in at 15.4. Economists expected a reading of 10.0 in February compared with 3.3 in January. The manufacturing index indicates expansion in the mid-Atlantic region when it's above 0.
Bernanke wrapped up with his second day of testimony before Congress. On Wednesday, the new Fed chief said the U.S. economy remains on solid footing and left the door open for more rate hikes.
"The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately -- in the absence of countervailing monetary policy action -- to further upward pressure on inflation," Bernanke said.
To view Gregg Greenberg's video take on today's market, click here
"As anticipated, Bernanke supported the recent views on the economy," said Marc Pado, market strategist with Cantor Fitzgerald. "The yield curve inverted a bit more on his comments. He does not believe that an inverted yield curve at these yields is negative for the economy. One way to interpret that is that he will press on raising rates, not anticipating an economic slowdown, but instead reacting to one when it occurs."
Oil prices firmed after falling nearly $2 to close below $58 a barrel for the first time since late November. An Energy Department report showing rising inventories of crude, gasoline and distillates drove the selling. In Nymex floor trading, the March contract finished up 81 cents to $58.46 a barrel.
"In the war of rates vs. oil, one would have to say that oil is winning out," Pado added. "Concerns of further rate increases are coming to fruition, yet the market has continued to push higher. Energy prices have fallen quickly and have taken out several trading support levels."
Several high-profile technology companies reported strong earnings Wednesday night. Hewlett-Packard said its first-quarter profit rose 30% from a year ago to $1.2 billion, or 42 cents a share. Adjusted earnings of 48 cents a share were 4 cents ahead of estimates. The hardware giant also guided earnings higher for the current period. H-P was higher by $2.35, or 7.4%, to close at $34.02.
said it earned $142.8 million, or 9 cents a share, in its first quarter, about half of what it made a year ago due to restructuring charges. Adjusted earnings of 17 cents a share were a penny ahead of estimates. For the second quarter, Applied Materials sees earnings of 22 cents or 23 cents a share, above the 19-cent consensus. The stock fell 50 cents, or 2.4%, to $19.96.
posted fourth-quarter earnings of $939 million, or $1.06 a share, up from $825 million, or 91 cents a share, a year earlier. Revenue rose 12% to $16.95 billion from last year, as same-store sales rose 4.2%. The Thomson First Call estimate was for EPS of $1.05 on revenue of $16.87 billion. Target lost $1.21, or 2.2%, to $54.59.
reported fourth-quarter earnings of $551 million, or $2.34 a share, up from $333 million, or $1.17 a share, a year ago. Earnings from continuing operations were $1.92 a share, as net sales rose 4.2% to $6.20 billion from a year ago. Analysts expected earnings of $1.63 a share on revenue to $6.19 billion. Shares were ahead by $1.22, or 2.2%, to finish at $57.85.
reported a 43% decline in fourth-quarter profits, missing estimates. On an adjusted basis, earnings of 20 cents a share were 6 cents light. Sales of $494.7 million missed forecasts by about $10 million. Expedia dropped $4.43, or 18.3%, to $19.82.
Also Tuesday, investment bank
said it owns 30 million shares of
, giving it a 5% stake. Morgan Stanley said that the holding is for investment purposes and that it doesn't expect to agitate for change at the automaker. Shares of GM added 30 cents, or 1.4%, to $22.28.
Another car company,
, said fourth-quarter earnings roughly doubled from a year ago to $1.1 billion, reflecting strength at Chrysler. The company expects its 2006 profit to rise from 2005's. The stock fell by $2.12, or 3.6%, to $57.68.
XM Satellite Radio
said it has a fourth-quarter loss of $268.3 million, or $1.22 a share, widening from $188.2 million, or 93 cents a share, a year ago. Revenue more than doubled to $177 million from last year. The Thomson First Call consensus was for a loss of 92 cents a share on revenue of $173.8 million. XM said it had 5.9 million subscribers at the end of 2005 and expects to reach 9 million by the end of 2006. XM slid by $1.27, or 5%, to $23.98.
swung to a fourth-quarter loss of $51 million, or 29 cents a share, compared with a profit of $125 million, or 62 cents a share, last year. Results included a loss of $78 million, or 44 cents a share, from the sale of assets. The Thomson First Call consensus was for a profit of 18 cents a share. Sales rose slightly to $4.93 billion from $4.83 billion a year ago. Shares were down 93 cents, or 6%, to close at $14.51.
After the bell Thursday,
posted fourth-quarter earnings of $1.01 billion, or 43 cents a share, up from $667 million, or 26 cents a share, a year ago. Sales rose 13% to $15.18 billion from last year. Results beat estimates for earnings of 41 cents a share on revenue of $14.8 billion, according to Thomson First Call. Dell finished the session up 19 cents, or 0.6%, to $31.96 and was trading up another 1.4% in the after-hours session.
On Friday, earnings reports are expected from
Sirius Satellite Radio
A story in
The Wall Street Journal
on Thursday says
is considering launching an online music service to rival
iTunes and has held discussions with four music companies about providing content. Recording executives reportedly are warm to the plan out of concern about iTune's dominance of the category.
finished the session flat after the
said that billionaire investor Carl Icahn will give up his ongoing campaign to break up the company. The stock closed at $17.97.
Overseas markets were higher, with London's FTSE 100 adding 0.7% to 5829 and Germany's Xetra DAX up 0.4% to 5789. In Asia, Japan's Nikkei rose 0.7% overnight to 16,044 while Hong Kong's Hang Seng added 0.2% to 15,451.