Good News for a change!!:)
Stocks End Higher on GDP Data
URL:http://www.foxnews.com/story/0,2933,93407,00.html
Thursday, July 31, 2003
NEW YORK — Wall Street closed higher Thursday after investor confidence in the economy was boosted by a strong government report showing gross domestic product advanced much faster than expected in the second quarter.
The Dow Jones industrial average ended higher 33.75, or 0.37 percent, to close at 9,233.80. The Nasdaq Composite closed up 14.11, or 0.81 percent, at 1,735.02, while the Standard & Poor's 500 index was up 2.82, or 0.28 percent, to close at 990.31.
The Dow had earlier gained as much as 160 points, but stocks pulled back from sharper gains in the last two hours of trading, a phenomenon that often happens on the last trading day of the month, when portfolio managers make last-minute adjustments to maximize returns and look good to shareholders.
For July, the Dow climbed 2.8 percent, the S&P 500 rose 1.6 percent, and the Nasdaq Composite jumped 6.9 percent.
Volume was heavy with 1.6 billion shares changing hands on the New York Stock Exchange and 1.8 billion traded on Nasdaq.
The main force driving stocks higher on Thursday was new data released by the Commerce Department showing the U.S. economy grew at a brisk 2.4 percent annual clip in the second quarter, driven by a surge in defense spending.
The pickup in gross domestic product, or GDP, from an annual rate of 1.4 percent in each of the two prior quarters, easily beat Wall Street economists' forecasts for a 1.5 percent pace of second-quarter growth.
Also on Thursday, the government said the weekly number of Americans lodging new jobless claims drifted down unexpectedly to the lowest level since February.
The level of new claims, which gives an early reading on the resilience of the job market, edged down by 3,000 in the July 26 week to 388,000 from a revised 391,000 in the prior week, the Labor Department said.
The Purchasing Management Associated of Chicago (search) also reported encouraging economic data. The group's index of area business activity rose to 55.9 in June on a seasonally adjusted basis from 52.5 in May, according to Dow Jones Newswires.
A reading above 50 signals that the manufacturing sector is expanding, while a reading below 50 indicates it is contracting. The July reading exceeded analysts' forecast calling for 53.8.
"The fact that these numbers came in so good, you can only expect there's going to be even better numbers tomorrow," said Jack Francis, co-head of equity trading at UBS.
Friday brings another big batch of economic numbers, including closely watched reports on both the labor market and the manufacturing sector.
Adding to the optimism on Wall Street, several corporate giants reported strong earnings in the second quarter.
Click for List of Earnings
Procter & Gamble Co. (PG), the maker of Tide laundry detergent, Pringles potato chips and about 300 other consumer products, said profit rose as newer products and the weak dollar helped boost sales. Shares rose 12 cents to $87.87 on the New York Stock Exchange.
Exxon Mobil Corp. (XOM), the world's biggest publicly traded oil company, said its second-quarter profit rose on higher oil and gas prices and improved refining margins. Exxon gained 26 cents to $35.58.
Insurer Chubb Corp. (CB) said after the close of trading on Wednesday that its quarterly profit rose 20 percent. Its shares were up 4.6 percent, or $2.90, to $64.80.
CVS Corp. (CVS) climbed $1.04 to $29.99, adding to the $1.20 it gained Wednesday when the drug store company reported second-quarter profits that beat analysts' expectations by a penny a share. On Thursday, Morgan Stanley upgraded CVS to "overweight" from "equal-weight."
Merrill Lynch helped bolster the semiconductor sector after it raised its ratings on a number of companies in the sector, including National Semiconductor Corp. (NSM), which rose $1.59, or 8 percent, to $22.35. The Philadelphia Stock Exchange semiconductor index rose 2.22 percent.
Weighing on the market was Cardinal Health Inc. (CAH), which tumbled after the drug wholesaler's fiscal 2004 earnings forecast disappointed Wall Street. Its shares fell $9.71, or 15 percent, to $54.75.
Consumer products maker Newell Rubbermaid Inc. (NWL) also took a hit after it said its profit fell 17 percent amid weaker retail orders and it cut its earnings forecast for the year. Its shares dropped $4.79, or 17 percent, to $23.63.
The bond market had stock investors on edge again. U.S. Treasury prices crumbled and yields surged to one-year highs. The move fanned fears higher borrowing costs could deflate the housing market — an area of strength in an otherwise soggy economy.
Despite having the lead for most of the session, advancing issues ended up matching decliners on the New York Stock Exchange. Trading volume was moderate.
The Russell 2000 index, which tracks smaller company stocks, rose 3.22, or 0.68 percent, to 4768.02.
Overseas, Japan's Nikkei stock average finished Thursday down 0.7 percent. In Europe, Britain's FTSE 100 gained 0.4 percent, France's CAC-40 rose 1.2 percent and Germany's DAX index advanced 1.3 percent.
Reuters and The Associated Press contributed to this report. |
