Stocks stage late rally

Major gauges bounce back after previous day's slide, as investors move beyond growth worries; oil prices rise.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Stocks jumped Thursday afternoon, with the tech-fueled Nasdaq leading the way, as investors set aside worries about the day's weak economic news and opted to scoop up select shares.

The Dow Jones industrial average (up 68.34 to 12,552.96, Charts) and the broader S&P 500 (up 8.93 to 1,447.80, Charts) index both added around 0.6 percent. The Nasdaq (Charts) composite gained 0.9 percent.

marketwrap.gif
HOT STOCKS
INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER upgrades & downgrades earnings & warnings public offerings INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER

After the close, Apple said it is delaying the release of its new operating system, Leopard, to October from June, because it needed to divert its engineering resources to the new iPhone. The music player/handheld device hybrid is still on track for a June release, the company said.

Apple (Charts) shares fell nearly 2 percent in extended-hours trading.

Also after the close, CBS said it is permanently canceling Don Imus's radio show amid the fallout from racist and sexist comments he made about the Rutgers' women's basketball team last week. CBS (Charts) shares were little changed in extended-hours trading.

Also likely to be active Friday: General Electric (Charts), which reports earnings before the open.

Friday also brings the February trade balance, the March Producer Price Index (PPI) and the April consumer sentiment index from the University of Michigan.

"Between the Fed minutes yesterday and the import prices this morning, there's been disturbing inflation news," said John Forelli, portfolio manager at Independence Investments. "But the March retail sales numbers were good and so stocks are up."

The major gauges declined in the early going, extending the previous session's big sell-off. But the tone improved as the session wore on, with technology, biotech, energy, railroads and homebuilders leading the way.

Dell (up $0.40 to $24.65, Charts), Applied Materials (up $0.12 to $19.35, Charts) and Amgen (up $1.30 to $57.64, Charts) were among the heavily-traded Nasdaq stocks rising. MedImmune (up $5.79 to $43.63, Charts) jumped over 15 percent in unusually active trading after the biotech said it had hired Goldman Sachs to help it explore a sale of the company.

A rally in the railroad sector lifted the Dow Jones transportation (up 81.98 to 5,052.00, Charts) average by 1.7 percent, while rising oil prices boosted the Amex Oil (up 20.29 to 1,267.68, Charts) index by 1.6 percent.

Stocks tumbled Wednesday - and fell again early Thursday - after the minutes from the last Federal Reserve policy meeting made it clear that the central bank is unlikely to cut interest rates anytime soon.

Investors have been looking for signs that the Fed might lower borrowing costs, which can ultimately stimulate business and earnings and boost stock prices. However, the minutes - echoing the sentiments of recent Fed speakers - showed the bankers aren't likely to budge, or they could even raise rates this year as they balance rising inflationary pressures and a worsening economy.

Thursday's batch of weaker economic reports and weaker retail sales forecasts played into such concerns. The number of Americans filing new claims for unemployment jumped last week. Additionally, March import prices jumped more than expected.

"Investors are trying to work through whether yesterday was a one-day event or a reality check," said James Awad, president at Awad Asset Management.

After slumping in late February on global growth concerns, stocks spent March recovering, earning back most of what was lost. Prior to Wednesday's sell-off, the Dow had risen for eight sessions in a row, its biggest up streak in four years.

But concerns about the growth versus too much growth issue are likely to continue to limit any market advance in the months ahead.

Looking forward, "you're going to have bi-polar worries on both sides, but the reality will be down the middle, with good enough growth for profits, but not so much as to push inflation," Awad said.

He said in the short term, stocks may get an upward push from earnings, simply because expectations for the first quarter are so diminished that companies are likely to beat forecasts.

Wal-Mart Stores (down $0.01 to $47.26, Charts), Target (up $0.27 to $59.95, Charts) and Nordstrom (up $0.76 to $55.61, Charts) were among the retailers that reported better than expected March sales but warned about April sales.

Sprint Nextel (up $0.62 to $19.80, Charts) shares gained on reports that activist shareholder Ralph Whitworth has built a nearly 1 percent stake in wireless telecom and is calling for big changes at the company.

Railroad stocks continued to rise following last week's news that Warren Buffett's Berkshire Hathaway bought a 10.9 percent stake in Burlington Northern Santa Fe (up $4.18 to $91.83, Charts).

Nestle said Thursday it will buy baby-food maker Gerber from Swiss drugmaker Novartis (Charts) in a $5.5 billion in cash.

Research In Motion (Charts) slumped 8 percent after the BlackBerry maker reported higher quarterly earnings Wednesday that missed estimates. The company also said the Securities and Exchange Commission upgraded an informal probe into its stock option practices into a formal investigation.

Biotech Genentech (Charts) reported quarterly sales and earnings that topped forecasts, but its shares slumped.

Bed Bath & Beyond (down $0.73 to $40.00, Charts) reported higher quarterly earnings that missed estimates, sending shares lower.

Market breadth was positive. On the New York Stock Exchange, winners topped losers two to one on volume of 1.49 billion shares. On the Nasdaq, advancers topped decliners three to two on volume of 1.97 billion shares.

U.S. light crude oil for May delivery rose $1.84 to settle at $63.85 a barrel on the New York Mercantile Exchange after the government reported a big drop in gasoline supplies Wednesday.

COMEX gold for June delivery fell $2 to settle at $679.70 an ounce.

Treasury prices slipped, lifting the yield on the benchmark 10-year note to 4.73 percent, little changed from late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell against the euro and the yen.


Earnings set to slow

Wall Street's 1Q stars and duds

More on the markets

More on investing Top of page

-- CNNMoney.com staff writer Jessica Dickler contributed to this report.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.