Updated from 4:07 p.m. EST
Stocks closed higher Tuesday on growing perceptions that a U.S.-led attack on Iraq is not imminent, although some warned that the tech-led rebound could be short-lived.
Volume was light after a long and snowy holiday weekend, possibly exaggerating the gain amid a lack of big developments on the war and terrorism fronts.
Dow Jones Industrial Average
rose 132 points, or 1.67%, to 8041, while the
gained 36 points, or 2.78%, to 1346. The
closed 16 points higher, or 1.95%, to 851. Volume was lighter than a week ago as a snowstorm in the northeastern U.S. disrupted transportation, and some traders did not make it to work.
"I don't think this move has any fundamentals attached to it," said Alan Farley, a professional trader and contributor to
. "We're oversold, with too many short-sellers and put holders in the system, which need to be shaken out.
"It makes me bearish to see a rally into the expected war period. This could take the buying pressure out of the equation, suggesting the smart money is waiting to sell short into the war event," Farley said.
Market players were acting on expectations that military action won't happen in the next couple of weeks. U.K. Prime Minister Tony Blair said at a news conference Tuesday that "there is no rush to war," but that "there will be horrendous consequences" if no action is taken against Iraq.
Blair's latest remarks add to chief United Nations weapons inspector Hans Blix's suggestions Friday that his team needed more time to find weapons of mass destruction in Iraq. The Dow is now up close to 300 points in the two sessions since Blix's address, while the Nasdaq has added close to 60.
, posted earnings of $2.5 billion, or 57 cents per share, on $71.6 billion in sales. The results beat estimates by a penny a share, according to Thomson Financial/First Call. In premarket trading, shares of Wal-Mart fell 0.39% to $48.96.
, the world's largest publicly traded provider of financial news and information, expects its sales in the first half of the year to fall about 9% because of lower demand for its financial information system.
The company said it will cut 18% of its workforce, or 3,000 jobs, after its biggest full-year loss ever. Reuters posted a loss of $630 million for 2002, compared with a thin profit the year earlier. Revenue also had a drop of 8% to $5.7 billion year over year. Reuters shares shed $1.32, or 8.9%, to close at $13.48.
With many companies laying off workers,
, the largest U.S. supplier of uniforms, lowered its 2003 forecasts Tuesday, citing lower demand from airlines, hotels and manufacturers. The company said net income will rise to $1.43 to $1.50 a share, compared with the initial estimate of $1.55 to $1.62 a share. Cintas shares closed 11% lower at $35.09.
Homebuilding stocks were among the best performers of the session, as shares of
Interest rates remain at historic lows and demand has shown few signs of abating. Nonetheless, the January housing starts number will be released Wednesday and the market expects a decline to 1.765 million, from 1.835 million in December, according to
said it's still comfortable with existing revenue guidance calling for sequential growth in its second fiscal quarter, while
said it was on track to meet its 2003 earnings targets. Lucent shares gained 5.3% ending the day at $1.79.
Shares of biotech
La Jolla Pharmaceuticals
collapsed Tuesday, shedding more than 70%, after the company reported disappointing trial results of its lupus renal treatment. The shares closed at $2.13 after losing over $5.
XM Satellite Radio
soared 19.4% to $4.50 after a bullish article in
suggested the company was poised for huge growth in the burgeoning satellite-radio business.
, the largest power seller in Texas, lost ground after billionaire investor Warren Buffett said he took a 5.6% stake in the company, according to regulatory filings submitted last Friday. Buffett bought notes in TXU that can be converted into 19 million common shares in 2012. TXU shares closed 0.94% lower at $15.84 reversing earlier gains.
shares finished the session 1.83% lower, at $7.51 after the utilities company received another extension of its debt waivers as it continues to inch closer to refinancing.
Treasuries were higher with the 10-year note up 5/32 to yield 3.94%.
Overseas markets also closed higher, with London's FTSE 100 up 1% to 3729 and Germany's Xetra DAX gaining 1.15% to 2740. In Asia, Japan's Nikkei shed 0.9% to close at 8692, while Hong Kong's Hang Seng moved up 0.14% to 9397.
The dollar lost ground against the yen after Japanese Finance Minister Masajuro Shiokawa said he won't discuss the currency in a meeting with U.S. Treasury Secretary John Snow this week, suggesting Japan won't look for assistance from other governments to weaken the yen. The dollar was stable against the euro on the softening war posture.
April 2003 crude oil futures were little changed on expectations enough heating oil is on its way from Europe to meet increased demand amid cold weather in the U.S.