Upbeat Wall Street takes stocks higher
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By Amy Baldwin
Associated Press
NEW YORK — A succession of better-than-expected earnings reports sent stocks climbing for a second day today as investors grew more convinced that the worst is over for the economy and Wall Street. A surge in consumer confidence fed the buying momentum, and allowed the market to overcome several waves of profit-taking.
Upbeat profit reports again flowed in from big companies, this time, Northrop Grumman, DuPont and Bristol-Myers Squibb.
"We basically are on a bit more solid footing than we have been in quite a while," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn.
And the uptick in consumer sentiment is "a good reason for people to be enthusiastic," said Brian Bruce, director of global investments at PanAgora Asset Management in Boston.
The Dow Jones industrial average closed up 31.38, or 0.4 percent, at 8,502.99, according to preliminary calculations. Yesterday, the Dow climbed 165.26.
The broader market also advanced. The Nasdaq composite index rose 9.06, or 0.6 percent, to 1,471.30. The Standard & Poor's 500 index advanced 3.00, or 0.3 percent, to 917.84.
Investors seemed torn between caution, which manifested in profit-taking, and a desire to be part of the market's latest advance.
"After the rally we have had, people have become a lot more selective about their purchases. The cliche is, 'The easy money has been made at this point,' " said Brian Pears, head equity trader at Victory Capital Management in Cleveland.
Today's economic news was encouraging. The Conference Board reported that consumer confidence rose sharply in April as the swift outcome in Iraq evaporated war worries. The industry group said its Consumer Confidence Index rose to 81.0 from a revised 61.4 in March and much better than the reading of 70 that analysts predicted.
There was also good news about U.S. workers' wages and benefits, which the Labor Department said rose by 1.3 percent in the first quarter. It was the biggest increase in nearly 13 years and almost double the 0.7 percent gain seen in the fourth quarter of 2002.
The market sees an increase in workers' pay as a potential boost for the economy; consumer spending accounts for two-thirds of the gross domestic product.
Over the past few weeks, companies have reported surprisingly strong profits and economic readings have turned more positive, prompting investors to buy stocks with renewed confidence.
"Investors were bracing for a slowdown in the economy. ... If anything, earnings are coming in a tad bit better than expected and that is alleviating some uncertainty," Goldman said.
Among the gainers, Northrop Grumman climbed $2.76 to $89.29 after posting first-quarter earnings that were 35 cents a share higher than Wall Street expected and boosting its 2003 outlook.
DuPont rose 66 cents to $42.39 on quarterly profits that surpassed analysts' expectations by 7 cents a share. Bristol-Myers Squibb advanced 84 cents to $25.20 after reporting earnings that were a penny a share higher than analysts anticipated.
But Alliance Capital fell 85 cents to $31.50 on first-quarter earnings that missed analysts' expectations by 5 cents a share.
The Russell 2000 index, the barometer of smaller company stocks, rose 0.63, or 0.2 percent, to 395.83.
Advancing issues narrowly outnumbered decliners about 7 to 6 on the New York Stock Exchange. Volume was moderate.
Japanese financial markets were closed today for a national holiday.
