Updated from 4:09 p.m. EDT
Stocks resumed their ascent Thursday, with the
Dow Jones Industrial Average
ending near two-month highs, as an upward revision to first-quarter economic growth coaxed buyers back from a midweek strike.
Technology led the way, with the
adding 21.12 points, or 1.03%, to 2071.24, for its ninth gain in 10 sessions. The Dow jumped 79.8 points, or 0.76%, to 10,537.60 while the S&P 500 rose 7.61 points, or 0.64%, to 1197.62. In other markets, the 10-year Treasury was up 1/32 in price to yield 4.08%, while the dollar rose against the yen and euro.
Trading volume on the
New York Stock Exchange
was 1.62 billion shares, with advancers beating decliners by almost a 3-to-1 margin. Volume on the Nasdaq was 1.60 billion shares, with advancers outpacing decliners 2 to 1.
"Investors are starting to recognize that tech is taking the lead away from energy," said Paul Nolte, director of investments with Hinsdale Associates. "I don't anticipate we'll get more in the way of movement, though. I would anticipate the market quiets down, with the holiday Monday and a ton of economic reports coming next week. The market is acting a lot better, but the only problem I have is the lack of trading volume."
"The rally has stalled here over the past couple days, but there appears to be little damage to its underlying strength," said Ken Tower, chief market strategist with CyberTrader. The Dow is up 3.9%, and the Nasdaq more than 5.4% over the past two weeks.
Before the bell Thursday, the Commerce Department issued its second estimate of first-quarter gross domestic product, saying it grew 3.5%, about half a percentage point more than previously believed. A key measure of inflation came in below forecasts.
"The biggest single change was in the import numbers, which were revised to 9.1% from 14.7%, thereby boosting growth," said Ian Shepherdson, chief economist with High Frequency Economics. "There was also a hefty downward revision to inventories, to $68.4 billion from $80.2 billion, but this is still too big to reconcile with the monthly data."
Also, the Labor Department said Thursday that initial jobless claims for the week ended May 21 rose by 1,000 to 323,000, a smaller increase than economists expected. The less-volatile four-week moving average increased by 500 to 330,500, a five-week high.
"Steady or declining claims are better than increases," said Shepherdson. "A sustained rise in claims is always bad news. There's no sign of that now."
Bulls maintained the upper hand in energy markets, with the July crude contract finishing up 3 cents to $51.01 a barrel. Since assuming front-month status Monday, the July contract has gained 5%, with the lion's share of the gain coming yesterday when the Energy Department reported an unexpected decline in crude inventories.
Speaking before the Senate Banking Committee, Treasury Secretary John Snow addressed Congress on international economic and exchange-rate policies. Snow repeated his views regarding China's currency, continuing to pressure China by saying the country should adopt a more flexible rate.
"It is critical that we address the issues of imbalances aggressively and in a cooperative spirit with the goal of raising global growth," said Snow. "Nothing would do more damage to the prospects of increasing living standards throughout the world than efforts to inhibit the flow of trade. However, it is incumbent on China to address concerns before mounting pressures worldwide to restrict trade harm the openness of the international trading system."
On Thursday, luxury homebuilder
reported another quarter of sharply higher earnings and raised its future guidance. Toll Brothers' earnings rose to $170.1 million, or $2.01 a share, on a 52% jump in revenue to $1.25 billion. Analysts were expecting earnings of $1.79 a share on revenue of $1.26 billion. The company now sees full-year earnings rising 70% from 2004, up from its old forecast of 60%. Shares of Toll Brothers rose $5.77, or 6.7%, to $91.50.
New York Attorney General Eliot Spitzer sued
American International Group
, AIG's former chief executive and chairman Maurice "Hank" Greenberg and the company's ex-Chief Financial Officer Howard Smith. Spitzer claims the insurer used fraudulent transactions to manipulate its financial statements in an attempt to deceive regulators and investors. Shares of AIG added $1.63, or 3%, to $55.71.
In M&A activity, Canadian firm
said Thursday that it still plans to purchase several
airplane manufacturing plants in the U.S. even after the International Association of Machinists and Aerospace Workers voted to reject the company's contract offer earlier this week. Onex was attempting to purchase Boeing facilities in Wichita, Kansas, and Tulsa and McAlester, Oklahoma, a total overall value of $1.2 billion. Boeing, one the Dow's strongest performer Thursday, closed at a 52-week high of $62.99, up $1.54, or 2.5%.
One day after outlining a complex bailout by former parent
, auto parts supplier
saw its share upgraded to buy Thursday at Deutsche Bank. The brokerage more than doubled its Visteon price target to $10, saying the Ford transaction -- which includes the divestiture of 28 plants -- is more generous than expected. Visteon was higher by 39 cents, or 5.4%, to finish at $7.56.
In earnings news,
said fourth-quarter earnings rose 5% from a year ago to $206.5 million, or 58 cents a share, on a 5% jump in sales to $2.45 billion. Adjusted earnings of 63 cents a share were a penny above estimates. Heinz lost 7 cents, or 0.2%, to $37.37.
third-quarter earnings rose 6% from a year ago to $209.8 million, or 43 cents a share, beating estimates by a penny. Sales rose 10% from last year to $11.75 billion, about $140 million shy of forecasts. Costco rose 7 cents, or 0.1%, to $45.49.
swung to a second-quarter loss of $15.6 million, or 4 cents a share, after earning $10.4 million a year ago. Adjusted for charges, Novell broke even in the quarter, missing per-share estimates by 3 cents. Novell dropped 45 cents, or 7.2%, to $5.83.
Johnson & Johnson
said it has received a nonapprovable letter from the Food and Drug Administration for its supplemental new drug application for Risperdal, a proposed treatment for Alzheimer's-disease-related psychosis. Shares were down 5 cents, or 0.07%, to close at $67.42.
said it repurchased 157,000 of its common shares in its fiscal fourth quarter for an average price of $14.25 each. The security systems company said it is authorized to purchase an additional 1.3 million shares. OSI Systems was up 67 cents, or 4.6%, to finish at $15.28.
was up 3.3% Thursday ahead of its first-quarter earnings report, due after the bell. The Thomson First Call consensus is for a loss of 11 cents a share in the quarter. TiVo added 22 cents to $6.94.
were higher after Chief Executive Kelly Martin said it is a question of when, not if, the company's multiple sclerosis drug Tysabri will return to the market. Elan was up 84 cents, or 11.6%, to $8.05 on the news.
said it will cut some fees for online options trading and retool offerings on its trading platform. For the largest U.S. discount brokerage this is the third time in six months it has cut its fees, highlighting the rise in competition between online brokers. Schwab, which had lost 3.2% over the previous two sessions, rose 9 cents, or 0.8%, to $11.30.
was lower despite brokerage Thomas Weisel upgrading the stock to peer perform from underperform. On Tuesday, Eyetech fell 46% after
said its Lucentis treatment for an eye condition helped maintain or improve eyesight in 95% of patients in a trial, a blow to Eyetech, which received marketing clearance for a similar product in December. Shares were down 69 cents, or 4.7%, to $13.94.
In other ratings news, Merrill Lynch upgraded
Electronic Data Systems
to neutral from sell, citing the company's restructuring progress, better free cash flow and recent competitive wins. In a separate note, Merrill Lynch downgraded
to neutral from buy, citing recent strength in the technology management systems firm's stock. EDS added 52 cents, or 2.7%, to $20. Meanwhile, Fiserv was off 5 cents, or 0.1%, to close at $42.61.
Overseas markets were higher, with London's FTSE 100 adding 0.5% to 4994 and Germany's Xetra DAX rising 1.1% to 4436. In Asia, Japan's Nikkei rose 0.1% overnight to 11,028, while Hong Kong's Hang Seng rose 0.1% to 13,570.
Friday will bring the final economic reports of a busy week. First, the Commerce Department will report personal income and personal spending levels for April, with economists expecting a 0.6% and 0.8% increase, respectively. Also, the University of Michigan will report the final reading of its consumer sentiment index for May, with an increase to 86.0 from the preliminary reading of 85.3 expected.
To view Aaron Task's video take on today's market, click here