Optimism about quarterly reports sends stocks up
By Michael J. Martinez
Associated Press
NEW YORK — A round of strong profit outlooks fueled anticipation over next week's first-quarter earnings reports, sending stocks markedly higher yesterday. The Dow Jones industrial average gained more than 115 points, posting its second triple-digit advance in the past three sessions.
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"I think the market was oversold over the past month, and we're now seeing that cash that's been on the sidelines coming in," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "As we get to the end of the quarter, we'll see at least a couple days of up markets heading into earnings."
The Dow rose 116.66, or 1.1 percent, to 10,329.63. The index gained 170.59 on Thursday, but dropped 5.85 on Friday.
Broader stock indexes were also higher. The S&P 500 was up 14.41, or 1.3 percent, at 1,122.47, and the Nasdaq composite index gained 32.55, or 1.7 percent, to 1,992.57.
With last week's gains in mind, some analysts were cautiously optimistic that the market may have pulled out of its recent slump, at least for the short term. The lack of worrisome geopolitical news also helped the markets.
"We had a pretty significant discount introduced into the market due to the terrorism concerns," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group. "The more we can put that behind us, the better off we'll be."
Friday's jobs report will be the first piece of truly market-moving economic news in weeks, according to John Lynch, chief market analyst for Evergreen Investments. If the figure comes in too low, investors will worry about the economy; too high, and investors will worry about interest rates rising before year's end.
"Hopefully, we'll come in at about 100,000 new jobs," Lynch said. "We do that, and I think our momentum will continue through earnings just fine."
With only one more week to go before earnings season begins in earnest, investors were encouraged by a number of positive earnings estimates from investment firms. Shares of nVidia Corp. jumped $1.05 to $25.40 as Wedbush Morgan said earnings at the video chip maker should come in ahead of estimates. Online auctioneer eBay Inc., up $1.61 at $68.41, and heavy equipment maker Caterpillar Inc., up $2.02 at $79.46, benefited from positive earnings outlooks as well.
Biotech firm Amgen Inc. gained $1.46 to $59.55 after it said it would buy the outstanding shares of pharmaceutical company Tularik Inc. for $1.3 billion. Amgen already owns 21 percent of Tularik, which skyrocketed $7.53, or 44 percent, to $24.53.
Tyson Foods Inc. said it received notice from the Securities and Exchange Commission that the government was conducting an informal investigation into executive perks at the company.
Advancing issues outnumbered decliners by more than 5 to 2 on the New York Stock Exchange, where consolidated volume came to 1.79 billion shares, compared with 1.70 billion on Friday.
The Russell 2000 index of smaller companies gained 10.47, or 1.8 percent, to 583.39.
