Wall St. basks in gains
Banking on better times, stock investors keep hope alive.
NEW YORK (CNNmoney) - U.S. stocks cemented a five-week advance Friday as investors continued looking beyond economic weakness to a time of rebounding growth next year.|
Fresh data showed that new home sales fell to a one-year low last month, while consumer confidence saw a modest bounce from September's depths. JDS Uniphase, the fiber-optics supplier, lost money in the latest quarter and warned of a sales short-fall ahead.
But stocks rose all the same. The Dow Jones industrial average stands 60 points from its pre-Sept. 11 level, a milestone other major indexes crossed earlier this month.
"You buy the market when the fundamentals are the weakest," Ned Riley, chief investment strategist at State Street Global Advisors, told CNNfn's Street Sweep. "I think the fundamentals are turning and I don't think people realize it yet."
The Dow Jones industrial average rose 82.27 points, or 0.9 percent, to 9,545.17, gaining 3.7 percent on the week. The Nasdaq slipped 6.51 to 1,768.96, rising 5.8 percent over the last five sessions. Up 2.9 percent on the week, the Standard & Poor's 500 gained 4.52 to stand at 1,104.61.
More stocks rose than fell. On the New York Stock Exchange, advancing stocks edged out decliners 1,839 to 1,261 as 1.2 billion shares changed hands. Nasdaq advancers topped decliners 1,845 to 1,723 as 1.5 billion shares traded.
In other markets, Treasury securities rose. The dollar was little changed against the euro and yen.
Since bottoming Sept. 21, the Nasdaq has gained nearly 25 percent while the Dow industrials are up more than 15 percent from their September low. Friday marked Wall Street's fourth weekly gain in five weeks.
"This market has gotten to the point were people are looking for any excuse to buy stocks," Warren Meyers, of NYSE member Walter J. Dowd, told CNNfn's Market Call.
Meyers linked the buying to fears of missing a rally. He also cited short covering, when investors who incorrectly bet stocks would fall must buy them back. He said any upbeat profits or surprise success in the Afghanistan military operation could ignite a rally.
The Dow's biggest winner, United Technologies (UTX: up $2.54 to $57.01, Research, Estimates), rose 4.8 percent. The company's Pratt & Whitney jet engine unit could benefit from a $200 billion government contract, whose announcement was due after the close of trading.
After the bell, the government awarded the jet fighter contract to Lockheed Martin, which will need Pratt & Whitney engines to power the planes. Lockheed Martin beat out Boeing for the contract.
Chuck Hill, director of research at First Call, called Lockheed the favorite over Boeing (BA: up $1.78 to $37.68, Research, Estimates), whose gains also lifted the Dow.
Lockheed Martin (LMT: up $1.02 to $49.92, Research, Estimates) reported that third-quarter profit rose to 41 cents a share excluding one-time items, topping forecasts, from 28 cents a share a year earlier.
Dow component Honeywell (HON: up $1.00 to $30.00, Research, Estimates), a maker of aerospace products, also rose.
Nasdaq's second-most actively traded stock, JDS Uniphase (JDSU: down $1.19 to $8.77, Research, Estimates), said it once again lost money in the latest quarter as the supplier of fiber-optic gear suffers from slowing orders. The company said sales in the current quarter will fall short.
VeriSign (VRSN: down $10.52 to $42.82, Research, Estimates) also tumbled. Bear Stearns downgraded shares in the Internet address and security company to "neutral" from "attractive." VeriSigns' profit topped forecasts Thursday.
But Ericsson (ERICY: up $0.13 to $4.48, Research, Estimates) rose. The mobile phone maker, posted another loss and said its chairman will step down.
In other gainers, Taiwan Semiconductor (TSM: up $0.65 to $13.90, Research, Estimates) posted a profit that met forecasts and raised its guidance for the current quarter.
Amgen (AMGN: up $1.20 to $59.45, Research, Estimates) said it earned 30 cents a share in the latest quarter, 1 cent better than expectations, on strong sales of its anemia drug, epogen.
In economic indicators, the University of Michigan said its final reading of October consumer sentiment edged up to 82.7, suggesting attitudes about the economy have stabilized since Sept. 11.
Separately, new homes sales fell 1.4 percent to an annual rate of 864,000 units, the government said. The decline to the lowest levels in a year came one day after sales of existing homes tumbled 11.7 percent in September and durable goods orders fell 8.5 percent.
But that didn't keep stocks from rallying Thursday as investors continued anticipating an economic rebound in 2002. Bulls are encouraged by the government, which has cut interest rates and taxes while vowing to boost spending.
The House of Representatives this week passed a $100 billion economic stimulus package heavy on corporate tax cuts.
Corporate profits are expected to have fallen more than 20 percent in the September quarter before declining this quarter and the next. But analysts forecast rising earnings next spring, two years after stocks began sliding from record levels.
The latest gains raise questions about sustainability from investors burned by short-lived rallies before. Stocks surged from April to June this year, only to fall anew, and remain lower on the year.
The Nasdaq is down 28 percent this year while the Dow is off 11 percent.
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