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Stocks Get It Together

Strong durable-goods data and several solid earnings reports finally register.
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Updated from 4:08 p.m. EDT

After a sputtering start, stocks ended the week's final session with big gains, celebrating news the consumer is still buying and that earnings season continues to go well.

Down 30 points early on, the

Dow Jones Industrial Average

gained 172.06 points, or 1.9%, to 9284.57, while the

Nasdaq Composite

gained 29.28 points, or 1.7%, to 1730.70. The

S&P 500

was up 17.08 points, or 1.7%, to 998.68.

The afternoon rally lifted all three indices to gains for the week, too, with the Dow up 96.52 points, or 1% from last Friday, the Nasdaq up 22.2 points, or 1.3%, and the S&P up 6.36 points, or 0.5%.

Treasury bond prices were volatile Friday, with the yield on the 10-year ending up to 4.18%.

Durable goods orders for June rose 2.1%, topping the 1.2% growth expected by economists and better than the zero growth seen in May. Aircraft orders from low-cost airlines and automobile sales, which rose 3.9%, helped the number come in strong. Excluding transportation, durable goods rose 1.4%, which still beat estimates and May's reading. New orders increased 0.6%, also stronger than expected.

In other economic news, June new-home sales were stronger than expected, coming in at 1.16 million, better than the 1.11 million expected by analysts, and flat with the 1.157 million new homes sold in May. Existing-home sales came in at 5.83 million for June, lower than the 6 million expected by analysts, and flat with the revised 5.85 million existing homes sold in May.

"These numbers are good, but they have to catch up to the market a little bit more. On the earnings front, reports have been fantastic, but the market knew this a couple months ago, and we're seeing things catch up now," said Joseph Kalinowski, director of research at Puglisi & Co. "The real catalyst is real growth over the rest of the year. It doesn't help when a big company like

eBay

comes out and somewhat disappoints the market."

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Indeed, eBay was drifting lower despite saying Thursday night that quarterly profit and revenue practically doubled, coming in at $152 million, or 33 cents a share, on revenue of $509.3 million. The online auction house also said it will split its stock 2-for-1, but expectations were higher, given eBay's lofty valuation. Shares were down $3.50, or 3%, to $112.24.

"Nonmarket news has pressured the market," he said. "There were rumors about raising the terror alert level yesterday, about planes flying too close to the presidential motorcade, and that shooting in City Hall in New York City. In the summer when volume is thinner, these stories can push around the market."

Some attributed the late-session runup to concern among shorts that Saddam Hussein might be captured or killed over the weekend. Indeed, stocks came off the day's lows Friday after

Fox News

reported that Saddam's personal bodyguards may have been part of the 13 people detained in a raid on a home south of Tikrit.

JDS Uniphase

(JDSU)

fell 30 cents, or 9.4%, to $2.85 after narrowing its fiscal fourth-quarter loss. Sales were flagging on weak demand for communications equipment. The company also said revenue will fall in the first quarter of fiscal 2004.

Drugmaker

Pfizer

(PFE) - Get Pfizer Inc. Report

posted a second-quarter loss, but revenue grew strongly, and the company affirmed its targets for 2003 and 2004. Shares were up 52 cents, or 1.6%, to $33.07.

Starbucks

(SBUX) - Get Starbucks Corporation Report

said fiscal third-quarter net income rose, beating analysts' forecasts with the help of new beverages and nontraditional outlets. The coffee-shop chain also reaffirmed its 2003 profit estimates. Shares gained 31 cents, or 1.2%, to $26.70.

Meanwhile,

The Wall Street Journal

reported that

AOL Time Warner's

(AOL)

America Online unit may have been inflating its subscriber growth figures. Shares recovered from early losses and ended up 2 cents, or 0.1%, to $15.33.

Software giant

Microsoft

(MSFT) - Get Microsoft Corporation Report

said Thursday that it will hire as many as 5,000 new employees and increase its research and development budget by 8%, answering questions about what the company plans to do with its near $50 billion cash stash. Microsoft shares were up 89 cents, or 3.4%, to $26.89.

Weyerhaeuser

(WY) - Get Weyerhaeuser Company Report

said second-quarter earnings almost doubled. The company easily beat analyst estimates, but said several of its markets remain difficult. Shares were down 19 cents, or 0.3%, to $56.34.

National-Oilwell

(NOI)

announced second-quarter earnings of 24 cents a share, missing estimates by 3 cents and sending shares down 60 cents, or 3%, to $19.31.

Great A&P Tea

(GAP)

said it lost 53 cents a share in the latest quarter. Its shares were down $1.05, or 10.5%, to $8.91.

T. Rowe Price

(TROW) - Get T. Rowe Price Group Report

announced second-quarter earnings that topped estimates on brisk inflows at its mutual funds. Shares were up 90 cents, or 2.3%, to $40.35.

Amgen

(AMGN) - Get Amgen Inc. Report

shares were off 41 cents, or 0.6%, to $68.71, after the company said the FDA approved its Enbrel drug for the treatment of ankylosing spondylitis, an inflammatory disease that can affect the lower back and joints. After the announcement, Goldman Sachs told investors the FDA approval should have a limited effect on its stock.

Nortel

(NT)

was upgraded by Goldman Sachs, which raised its rating to outperform from in line, and also by CIBC, which raised its rating to sector perform from sector underperform. Shares of Nortel were down 7 cents, or 2.3%, to $2.98.

Siebel Systems

(SEBL)

shares were up 26 cents, or 2.9%, to $9.14, despite the fact Prudential warned investors that Microsoft's push into customer-relations management software bodes poorly for the company.

Electronics Boutique

(ELBO)

and

Cross Country Healthcare

(CCRN) - Get Cross Country Healthcare, Inc. Report

were higher after being named to the S&P SmallCap 600, with the former up $1.45, or 6.1%, to $25.32, and the latter up 11 cents, or 0.8%, to $14.39.

In corporate deals, Swiss drugmaker

Roche Holding

said it is acquiring U.S. diagnostics company

Igen International

(IGEN)

in a deal worth $1.4 billion. Igen shares were up $22.05, or 59.3%, to $59.25.

Crude oil futures were lower in London, while the dollar was slightly weaker against the euro but unchanged against the yen.

Overseas markets were mixed, with London's FTSE 100 ending down 0.4% at 4131 and Germany's Xetra DAX closing down 0.5% at 3357. In Asia, Japan's Nikkei closed 0.2% lower at 9648, while Hong Kong's Hang Seng gained 0.2% to 9939.

On Thursday, the Dow fell 82 points to 9112.5, while the Nasdaq ended down 17.7 points at 1701. The S&P 500 lost 7 points to 981.6.