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The Honolulu Advertiser

Posted at 1:12 p.m., Tuesday, October 10, 2006

Dow inches to 4th record close in 2 weeks

Advertiser Staff

NEW YORK — The Dow Jones industrial average set its fourth record close in two weeks today, finishing less than a point above its previous closing high.

After a lackluster day of trading, broader indexes also rose slightly, putting the Standard & Poor's 500 back near its 5 1/2 year highs.

Investors nudged stocks slightly higher in gains in advance of Alcoa's after-the-bell quarterly financial report which traditionally marks the start of earnings season.

"If I'm an investor and I didn't already buy, I don't know what's going to make me buy now," said Doug Sandler, chief equity strategist, Wachovia Securities. "We'll wait for the facts to come in when earnings come out."

The Dow Jones industrials rose 9.36, or 0.08 percent, to close at 11,867.17. Its previous record, set Thursday, was 11,866.69.

Broader stock indicators were higher. The Standard & Poor's 500 index rose 2.76, or 0.20 percent, to 1,353.42, and the Nasdaq composite index rose 3.66, or 0.16 percent, to 2,315.43.

Earnings season began in earnest today when the aluminum maker Alcoa Inc. reported an 86 percent jump in third-quarter profit after the closing bell. Despite the advance, the results missed analysts' estimates and the stock fell in after-hours trading.

Investors will be watching earnings keenly and they're likely to take a hard line toward companies that either merely meet analysts' expectations or disappoint by however narrow a margin. Wall Street is split between those who feel stocks are at a top and those who feel the market has further to run.

September, which is historically the weakest month of the year, was one of the strongest months this year. The market is coming off the strongest three-month period in a decade, said Scott Fullman, director of investment strategy for Hapoalim Securities USA.

"When you combine all these factors, you can understand why the bull's a little tired," he said.

Oil prices closed sharply lower, with a barrel of light sweet crude dropping $1.44 to settle at $58.52 on the New York Mercantile Exchange, its lowest close since Feb. 16.

Bond prices fell sharply, with the yield on the 10-year Treasury note at 4.76 percent, up from 4.70 percent Friday. The U.S. bond market was closed yesterday for Columbus Day. The U.S. dollar rose against other major currencies. Gold prices were mostly lower.

In company news, Alcoa dropped 6.6 percent to $26.41 in after-hours trading after finishing regular trading up 30 cents at $28.29.

Biotech drugmaker ImClone Systems Inc. rose $1.19 to $31.09 after it said its chairman and another board member resigned, following a week of squabbles between the company and billionaire financier Carl Icahn, who owns about 14 percent of ImClone. Icahn said last month that half the board should be removed because directors were unable to accept a $36 per share offer for the company from a bidder that The New York Times identified as Sanofi-Aventis SA. Sanofi fell 24 cents to $43.35.

Google Inc., which confirmed late yesterday its plans to buy Internet video sharing Web site YouTube Inc. for $1.65 billion in stock, fell $2.35 to $426.65 after its 2 percent rise in trading yesterday.

Grocer and food distributor Supervalu Inc. rose $1.38 to $32.37 after it reported second-quarter profits had nearly quadrupled from the year-ago period. Supervalu, which attributed much of its earnings increase to its purchase of Albertson's grocery stores, also boosted its guidance for the year.

Advancing issues led decliners by 8 to 7 on the New York Stock Exchange, where consolidated volume was 2.44 billion shares, up from 2.00 billion at the same time yesterday, when trading was light because of the Columbus Day holiday.

The Russell 2000 index of smaller companies rose 1.31, or, 0.18 percent, to 745.88.

Overseas, Japan's Nikkei stock average rose 0.25 percent. Britain's FTSE 100 rose 0.69 percent, Germany's DAX index gained 0.55 percent, and France's CAC-40 rose 0.47 percent.