After so many bloodsucking sessions on Wall Street, the stock market has color again this morning, resuscitated by good news from market bellwethers
In what has become an unfamiliar sight on trading floors, stock screens were blazing green. Lately, the
Dow Jones Industrial Average was up more than 200 points. No doubt, the
blue-chip index has a long haul. Yesterday, it landed briefly in bear market territory, or 20% off its all-time high. But every little bit can help it crawl out of its hole.
Word that Dell expects to hit its first-quarter earnings target was music to investors' ears. After the close of regular trading yesterday, the PC maker said it would meet previously announced earnings targets for its fiscal first quarter, which ends in about a month. The bad news is, the company already had slashed first-quarter targets twice. Even though it didn't give any guidance for the rest of the year, Dell was leaping 12.7% to $25.
Putting today's gains in perspective, Tony Cecin, manager of
Nasdaq trading at
U.S. Bancorp Piper Jaffray
, said he sees a rally in a bear market environment. "We've been getting bludgeoned day in and day out," he said. "So we're due for an up day." Taken together, cash coming off the sidelines and short-covering -- the accelerated buying of stocks
shorted by investors -- have led a powerful rally.
On the heels of repeated warnings about missed targets from high-profile companies in the past few weeks, Dell's reaffirmation is comforting -- at least, for now. But investors have their guards up. The company's announcement doesn't really tell people anything about the earnings picture going forward, which is what Wall Street needs most. There is still little visibility, in general, about corporate earnings.
The Nasdaq, which closed 68% off its all-time high yesterday, was trading up nearly 100 points this morning and back above 1700 -- an important benchmark for the index. Investors were encouraged by news that networker Cisco, in a bid to revive slumping growth, plans to duck out of the optical router business to focus on the metro-area networking market. The networker was recently ahead 7.3% to $14.63.
Wall Street seems to think this decision will give other battered networking companies like
more breathing room in the router space. Lucent sank yesterday on rumors it was headed for bankruptcy, despite its official denial that it would file for Chapter 11 protection. This morning, all these companies were gaining.
was surging 20.6% to $15 after
upgraded the uberportal to a buy from market perform. "Estimates are finally low enough, and valuation is much more reasonable with the stock at less than $13," wrote Lehman analyst Holly Becker. "Also, we think the downside on the stock is protected by takeover potential."
Peter Eavis has a more
sober outlook on the company. He recently wrote that Yahoo! wouldn't start looking attractive unless it trades below $5 a share.
Investors barely noticed the latest round of weekly jobless claims that was released this morning before the bell. Initial jobless claims for the week ended March 31 rose 18,000 to 383,000, their highest level since July 4, 1998, when they totaled 384,000. Tomorrow, investors get the real thing: the February
. It is one of the most closely watched monthly economic report.
Dow component and aluminum giant
unofficially kicked off the first-quarter earnings season today. Alcoa, up 2.4% to $36.40, reported earnings per share of 46 cents, smack in the middle of the 40 cent to 50 cent per share range that analysts had forecast. The company earned 47 cents per share a year ago.