Posted at 2:44 p.m., Thursday, June 12, 2003
Stocks rise again despite economy's mixed signals
By Hope Yen
Prices fluctuated for much of the day before ending modestly higher on a burst of late-day buying.
"There's a little bit of jitteriness," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "We have some negative reaction to business inventories being lighter than expected. ... But in general, we have a generally better tone to things."
The Dow Jones industrial average closed up 13.33, or 0.2 percent, at 9,196.55, having advanced in eight of the last nine sessions for a gain of 472 points.
The broader market also rose. The Nasdaq composite index gained 7.60, or 0.5 percent, to 1,653.62. The Standard & Poor's 500 index increased 1.03, or 0.1 percent, to 998.51.
The Commerce Department reported today that the nation's retail sales rose by 0.1 percent in May, compared to 0.3 percent in the previous month. That was slightly stronger than the flat reading analysts expected.
Meanwhile, the Labor Department said the number of American workers filing new applications for unemployment benefits last week dropped by a seasonally adjusted 17,000 to 430,000. Still, claims remained above the 400,000 mark, a level that suggests a lackluster job market.
And in a third report, the Commerce Department said business inventories of unsold goods edged up 0.1 percent in April as companies appeared to remain cautious about the economic outlook. Analysts were expecting a 0.2 percent rise.
Wall Street has seen strong gains in recent months on encouraging quarterly profits and anticipation of an economic recovery by year's end. Some analysts believe stocks may be clearly on an upward path, although others caution that the recent advance could have come too fast.
"The institutional investors, the pros if you will, are pretty darn optimistic at this point," said Hank Herrmann, chief investment officer at Waddell & Reed Financial, citing low interest rates and better corporate profits. "Retail investors are getting more optimistic but they're certainly not euphoric."
He added that stocks will likely continue their upward trend until the Federal Reserve's June 24-25 meeting as investors bet that policymakers will cut interest rates beyond their already 41-year low.
"The equity market is going to have a good bid all the way up to the Fed meeting," he said.
So far in 2003, the Dow is up about 10 percent, the Nasdaq higher 24 percent and the S&P up about 13 percent.
Gainers included Dow components AT&T, which rose $1.03 to $21.53, and Intel, which rose 25 cents to $22.14.
H.J. Heinz fell 58 cents to $33.82 after the food company reported fiscal fourth-quarter income that missed analysts' estimates by a penny.
H&R Block dropped $1.87 to $42.11 after the tax preparer posted quarterly profits that fell short of expectations.
Advancing issues outnumbered decliners 4 to 3 on the New York Stock Exchange. Volume was heavy.