Stocks Rise; Nasdaq has Best Week in a Year
By Jed Seltzer
Friday May 17, 4:50 pm Eastern Time
NEW YORK (Reuters) - Stocks rose on Friday as an upbeat outlook from the computer-chip sector and strong results from Dell Computer Corp. (NasdaqNM:DELL - News) drove the technology-loaded Nasdaq to its largest weekly jump in more than a year.
"Dell is a really important indicator, so it adds a little further strength to the feeling of economic rebound," said Gary Wedbush, head of trading at investment bank Wedbush Morgan. "The rise this week was pretty broad too, and it's specifically in industries that indicate that people are seeing a recovery, like semiconductors and retailing."
The Nasdaq Composite Index (NasdaqSC:^IXIC - News) erased early losses and edged up 10.95 points, or 0.63 percent, to 1,741.39, according to the latest figures available, creating a week-long winning streak that lifted the index 8.8 percent.
Nasdaq's five straight sessions of increases was the best streak since last fall.
The blue-chip Dow Jones industrial average (CBOT:^DJI - News) rose 63.87 points, or 0.62 percent, to 10,353.08, posting more than a 400-point jump for the week. It was a 4.2 percent gain, the best since September.
The broader Standard & Poor's 500 Index (CBOE:^SPX - News) climbed 8.36 points, or 0.76 percent, to 1,106.59, and also recorded its largest weekly gain since late September.
Helping to shake off the early weakness were Dell's results, a fifth consecutive month of rising semiconductor equipment orders, and improving consumer sentiment data.
Dell shares edged up 10 cents to $27.95 after posting quarterly profits that topped Wall Street expectations and saying revenues and earnings would improve in the current quarter.
The University of Michigan's preliminary May consumer sentiment index rose to 96.0 from 93.0 in April. Support for the better mood came from improving economic data and relative calm in the Middle East. Forecasts were for a drop to 92.7.
Winners beat out losers, with 17 stocks rising for every 14 that fell on the New York Stock Exchange and 19 stocks climbing for every 16 that fell on Nasdaq. More than 1.25 billion shares changed hands on the Big Board and more than 1.6 billion on Nasdaq.
"I think we've lost that sense of urgency to be in the market," said Charles Payne, market analyst at research firm Wall Street Strategies. "But all year long, the knee-jerk reaction has been to think the worst and most times, sell off. You've got to look at this market and think it has held its own very well this week."
Losses in oil-related stocks weighed on the market after Russia, the world's second biggest oil exporter, said it would abandon a pact with the OPEC cartel to restrict exports intended to support the market. More supply can depress oil prices, hurting profits at oil firms.
Some attributed swings in market values on Friday to options expiration, when options and futures contracts end. On such days, there are large trades in index futures and the underlying stocks by hedge strategists, resulting in volatile markets.
Other analysts pointed to lingering investor uncertainty about the strength of an economic recovery and swift upturn in corporate earnings.
"There are two things that haven't happened and that's why there hasn't been a sustained rally," said Tim Heekin, head of trading for Thomas Weisel Partners. "We haven't seen two back-to-back quarters of improved earnings and we haven't seen a resurgence in capital spending. It'll be late summer before we have rallies that will last."
Shares of Autodesk Inc. (NasdaqNM:ADSK - News) fell nearly 8 percent, or $1.22, to $14.38, after the maker of design software posted profits that fell 37 percent from a year ago, slashed its earnings guidance and said its chief financial officer was leaving for an Internet start-up company.
Some chip makers gained after industry group Semiconductor Equipment and Materials International said North American makers of semiconductor equipment recorded an increase in orders for the fifth consecutive month, giving credence to hopes the semiconductor slump is over.
Among energy stocks, Noble Corp. (NYSE:NE - News) fell $1.22, or 3 percent, to $40.31. Rowan Co. Inc. (NYSE:RDC - News) slid 71 cents, or 3 percent, to $25.02.
Utility and energy stocks also fell as worries persisted that companies recorded phantom trades purely to inflate volumes. Duke Energy (NYSE:DUK - News) fell $1.18, or 3 percent, to $33.52 while Dynegy Inc. (NYSE:DYN - News) shed 65 cents, or 8.5 percent, to $7.
Support -- where buyers are expected to enter the market -- is at 1,680 for the Nasdaq, 10,150 for the Dow and 1,083 for the S&P. Resistance -- the point where sellers are likely to surface -- is at 1,780 for the Nasdaq, 10,400 for the Dow and 1,120 for the S&P, according to research firm Schaeffersresearch.com. |
