NEW YORK (CNN/Money) -
A late-session recovery propelled stocks to a higher close Thursday, but Intel's mixed mid-quarter update after the bell and Friday's November employment report will determine trading Friday.
On Thursday, the Dow Jones industrial average (up 57.40 to 9930.82, Charts) and the Standard & Poor's 500 (up 4.99 to 1069.72, Charts) index each gained around 0.5 percent, while the Nasdaq composite (up 8.55 to 1968.80, Charts) posted a more modest gain. The Dow closed above 9,900 for the first time since May 28, 2002, when it finished the session at 9,981.58.
Despite the last-hour turnaround, the market had dragged its feet throughout most of the session. Anticipation ahead of the Intel news and anticipation ahead of the November employment report, due Friday morning, added to the market's hesitancy.
Shortly after the close, as expected, Intel (INTC: up $0.20 to $33.54, Research, Estimates) narrowed its revenue forecast for the current quarter to the upper end of the previously given range, saying that it now expects to post revenue between $8.5 billion and $8.7 billion. Previously, the company estimated fourth-quarter sales of $8.1 billion to $8.7 billion, and analysts' forecast was $8.55 billion.
However, what was not expected was news that the company will take a $600 million charge, due to weakness in its wireless business. The company said the charge will cut into fourth-quarter earnings per share by about 6 cents.
Intel shares lost around 3 percent in after-hours trade, pushing futures lower, indicating a weaker open Friday, barring a major upside surprise in the employment report.
"Short-term, the market is looking for an excuse to sell off," said Ram Kolluri, chief investment officer at GlobalValue Investors. "Year-to-date, you've got the Nasdaq up almost 46 percent, the Dow up nearly 20 percent, the S&P 500 up 22 percent, and there's a bit of a 'take the money and run' sentiment."
Friday's employment data are critical, Kolluri added, and if they disappoint in any way, they could provide an incentive to sell into the rally.
Economists surveyed by Briefing.com think that the unemployment rate held steady last month at 6.0 percent and that employers added 150,000 jobs to their payrolls after adding 126,000 in October.
With the focus on the monthly numbers Friday, investors shrugged off the weekly jobless claims report, which showed a slight rise to 365,000 last week, from an upwardly revised 354,000 the previous week and above economists' estimates.
Amid growing economic optimism, the major indexes have been bumping up against their highs of the year repeatedly over the last few weeks. The Nasdaq crossed 2,000 intraday for the first time in almost two years during trading Wednesday, a key psychological, if not technical, level. While the move was positive, on a technical basis, it also potentially set the market up for a pullback.
"The market has been trying to hit these highs for some time, but we've been nearing them with less and less enthusiasm," said Tim Heekin, head of stock trading at Thomas Weisel Partners. "I think we could see a correction of more than 5 percent through the end of the year." Heekin said any disappointment in Friday's monthly jobs report could provide a good excuse for a pullback.
As of Thursday's close, so far this week, the Dow is up around 148 points, the S&P 500 is up around 11 points and the Nasdaq composite is up around 8 points.
On the move
Cisco Systems (CSCO: up $0.68 to $23.98, Research, Estimates) rose 3 percent and was the Nasdaq's second most-active issue after Merrill Lynch upgraded it to "buy" from "neutral."
At midday, National Semiconductor (NSM: down $1.70 to $41.80, Research, Estimates) reported a strong fiscal second-quarter profit. But with the stock up 190 percent year-to-date, investors used the news as an excuse to take profits, sending the stock and the sector lower.
Shares of Qualcomm (QCOM: up $4.63 to $49.10, Research, Estimates) rallied 10.4 percent in active Nasdaq trade after the wireless chip maker raised its revenue and earnings forecast for its fiscal first-quarter results, due to better-than-expected sales of its mobile phone chips. J.P. Morgan upgraded the stock to "overweight" from "underweight" after the company raised guidance.
Career Education (CECO: down $2.94 to $36.54, Research, Estimates), a for-profit educator, slumped 7.4 percent in unusually active Nasdaq trade, even as it denied a former employee's allegations that it inflated enrollment numbers to boost profits.
Shares of electronics retailers Best Buy (BBY: down $3.27 to $54.15, Research, Estimates) and Circuit City (CC: down $0.70 to $11.80, Research, Estimates) both slid following their quarterly and monthly sales reports. Best Buy fell more than 7 percent in active NYSE trade, even after the company reported third-quarter same-store sales that beat estimates, perhaps, some analysts speculated, due to its failure to boost its current-quarter earnings forecast. Circuit City shares fell after the company missed third-quarter same-store sales forecasts.
The two companies' reports fell within a broader range of mixed results for a slew of retailers reporting November and early holiday-season sales Thursday.
Also on the NYSE, shares of Nortel Networks (NT: down $0.18 to $4.39, Research, Estimates) dipped 4 percent after the company's CEO said that he sees signs that there will be growth for telecom gear makers in 2004, but that a spending boom is unlikely.
In an attempt to avoid a potential trade war, the Bush administration opted to lift 20-month-old tariffs on international steel. The decision was expected and most steel stocks were unchanged after the announcement.
Market breadth was mixed to negative, with decliners and advancers pretty evenly split on the New York Stock Exchange, while on the Nasdaq, losers beat winners by eight to seven. Volume on the New York Stock Exchange reached 1.46 billion shares, while 2.07 billion shares changed hands on the Nasdaq.
NYMEX light sweet crude oil futures gained 16 cents to settle at $31.26 a barrel. COMEX gold fell 60 cents to settle at $404.20 an ounce.
Treasury prices edged higher, with the 10-year note yielding 4.36 percent. The dollar recovered a little after hitting a new all-time low versus the euro early today for the fifth consecutive session, but edged up versus the yen.
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