Updated from 4:07 p.m. EST
Blue chips closed solidly higher Wednesday as stronger-than-expected sales from U.S. automakers and falling oil prices helped ease the sting of
earnings miss. Tech stocks managed to inch ahead.
Dow Jones Industrial Average
rose 89.09 points, or 0.82%, to 10,953.95, lifted by a 4.8% rise in
was up 2.38 points, or 0.19%, at 1282.46, and the
overcame a Google selloff to add 4.74 points, or 0.21%, at 2310.56.
"To put it in perspective, even after the Dow's jump today, it is still underperforming the Nasdaq," said Art Hogan, chief market strategist with Jefferies. "The Dow had the ground to make up, and with the price of oil tanking it had a hand-in-glove reaction. Nasdaq did nothing in the face of Google getting slaughtered. What a divergent day it was."
About 1.92 billion shares traded on the
New York Stock Exchange
, with advancers beating decliners by a 9-to-7 margin. Trading volume on the Nasdaq was 2.30 billion shares, and eight stocks fell for every seven that rose.
The 10-year Treasury bond was down 11/32 in price to yield 4.56%, and the dollar rose against the yen and euro.
"Volatility hasn't picked up yet while interest rates keep heading higher," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "With the
come and gone, we're trying to figure out the next step here. Eventually, this will filter into worry."
Google was the story of the market day. After the close Tuesday, the company reported an 83% rise in quarterly profits but said adjusted earnings were just $1.54 a share, missing the $1.76-a-share Wall Street consensus. An unexpectedly high tax rate appeared to be the chief culprit, but backers who have ridden the stock up 20% since October weren't waiting around for explanations.
To view Gregg Greenberg's video take of the market, click here
Bears pointed to a declining revenue contribution from overseas sources. Google, which reported a 22% sequential rise in gross revenue to $1.92 billion, said sales from outside the U.S. made up 38% of the top line in the fourth quarter, compared with 39% in the third.
Google was down $30.88, or 7.1%, to $401.78.
was up 63 cents, or 1.8%, to $35.
Google's pain added to the murky tone set Tuesday afternoon when the
raised official interest rates by a quarter-point to 4.5% and left the door open for another hike in March. "Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," according to the Federal Open Market Committee.
The Fed, which transferred authority to Ben Bernanke from outgoing chairman Alan Greenspan on Tuesday, vowed a more data-centric approach to policy in coming months.
"A new Fed chairman is an unknown and as such offers nervous investors an excuse to sell," said Ken Tower, chief market strategist with CyberTrader.
Bernanke got a read on the U.S. factory sector Wednesday after the Institute for Supply Management said its manufacturing index for January fell to 54.8 from 55.6 in December. Economists had expected a slight dip to 55.5 in January.
"Overall, the survey is still very strong, but we hoped for a bit better," said Ian Shepherdson, chief economist with High Frequency Economics. "A further decline next month would be a bit disconcerting, but there is no reason to expect that."
Also, the Commerce Department said construction spending rose 1% in December, much higher than expectations of a 0.1% gain.
A key economic reading comes Friday when the Labor Department releases its January employment report. Economists are currently looking for a 250,000-person addition to nonfarm U.S. payrolls.
Stocks eased Tuesday in the wake of the interest rate action, with the Dow Jones Industrial Average closing down 35 points to 10,865 and the Nasdaq Composite losing a point to 2306.
Oil was lower a day after OPEC ministers in Vienna pledged to keep production rates high and an Energy Department report showed a stronger-than-expected build in crude inventories. March crude, after reaching $69 a barrel, finished at the lows of the session, down $1.36 to close at $66.56 a barrel.
In his State of the Union address, President Bush pushed for the development of alternative energy sources to break an "addiction" to foreign oil and advocated free-market solutions to rising health care costs. Bush set a goal of reducing energy imports by 75% over two decades and called for expanded research into a form of ethanol derived from agricultural waste.
Bush also asked for the permanent codification of tax relief, saying: "Because America needs more than a temporary expansion, we need more than temporary tax relief. I urge the Congress to act responsibly and make the tax cuts permanent."
Elsewhere in earnings,
said its fourth-quarter profit rose 21% from a year ago to $1.37 billion, or 29 cents a share, with adjusted earnings of 25 cents a share beating estimates by 3 cents.
Revenue rose to $11.89 billion from $11.11 billion a year earlier, edging out the $11.88 billion Wall Street target. The media conglomerate, which has been fending off an increasingly hostile dissident campaign from Carl Icahn, also said it has repurchased $3 billion of stock this year. The stock added 69 cents, or 3.9%, to $18.22.
Boeing said it earned $460 million, or 58 cents a share, in the fourth quarter, doubling earnings of $186 million, or 23 cents a share, a year ago. Results beat the Thomson First Call consensus of 44 cents a share. Sales rose 7% from a year ago to $14.20 billion, missing the Street's forecast of $14.78 billion.
Looking ahead, Boeing raised guidance for the next two years, mostly in line with expectations. Boeing rose $3.30, or 4.8%, to $71.61.
swung to a fourth-quarter loss of $42.4 million, or 25 cents a share, compared with a profit of $1.5 million, or 1 cent a share, a year ago. Excluding items, the loss was $32 million, or 19 cents a share. Analysts expected a loss of 16 cents a share, according to Thomson First Call. JetBlue dropped $1.86, or 14.3%, to $11.18.
reported adjusted fourth-quarter earnings of $164 million, or 81 cents a share, Tuesday night, reversing a year-ago loss. The profit was about 30 cents ahead of estimates, lifting the shares after hours. Chiron was higher by 3 cents, or 0.1%, to close at $45.63.
Away from earnings, shares of
Research In Motion
surged 9% after the U.S. government rejected a patent claim by competitor NTP. The stock was up $6.08 to finish at $73.61.
Automakers posted January auto sales results Wednesday, with unexpectedly strong results coming from
GM saw U.S. sales climb 5.8% in January, as car sales rose nearly 15% to offset a small decline in truck sales. GM added 46 cents, or 1.9%, to $24.52.
Ford said January sales rose 2% in January from a year ago, with an 18% gain in car sales offsetting a 7% decline in truck sales. Ford was up 8 cents, or 0.9%, to $8.66.
Daimler Chrysler saw vehicle sales rise 5% in January from last year. Chrysler Group sales were up 5%, while Mercedes-Benz sales increased 3%. Shares tacked on 78 cents, or 1.4%, to $58.10.
By sector, the Amex Airline Index fell 1.5%, the Philadelphia Semiconductor Sector Index rose 1%, and the Philadelphia/KBW Bank Sector Index dipped 0.2%
On Thursday, earnings results are anticipated from
Overseas markets were mixed, with London's FTSE 100 up 0.8% at 5806 and Germany's Xetra DAX adding 0.9% at 5727. In Asia, Japan's Nikkei fell 1% overnight to 16,480, while Hong Kong's Hang Seng fell 0.1% to 15,742.