NEW YORK (MarketWatch) -- U.S. stocks ended higher Wednesday as strength
in the technology sector helped the Nasdaq Composite clinch its seventh
straight session of gains, while the Dow Jones Industrial Average overcame
early weakness sparked by a profit warning from DuPont.
The Dow industrials ended just off their high for the session, up 31.86
points at 11,043.44.
The Nasdaq Composite Index rose 11.04 points to 2,331.36, while the S&P
500 Index gained 4.49 points to 1,294.18.
"We've had a tremendous upswing in stocks and that's obviously garnered a
lot of attention and I think we're probably seeing some new money move into
the market," said Stephen Massocca, president and head of trading at Pacific
Growth Equities. "As for the DuPont news, it was very company specific."
John Forelli, senior vice-president and portfolio manager at Independence
Investments, said the DuPont warning must be put in context.
"We have to remember that we're going to see the bad reports come out
early so I think it's too early for investors to give up on the earnings
season."
On the broader market for equities, advancers had an 18 to 14 edge over
decliners on the New York Stock Exchange, and led by a narrower 15 to 14 score
on the Nasdaq.
By sector, Internet stocks and airlines were the most notable decliners.
Semiconductors, brokers and computer hardware stocks are three of the
sectors showing the most significant gains.
Volume was heavy with 1.74 billion shares traded on the Big Board, while
2.39 billion shares were exchanged on the Nasdaq.
Crude, gold, dollar, bonds
Crude futures ended higher, with one analyst saying the market is being
bid up by speculators, but nervousness over Iran's plans to restart its
nuclear program was also in play.
Earlier, the benchmark February contract fell to a session low of $62.60
after an Energy Department report showing weekly gasoline and distillate
inventories, which includes winter heating oil, far exceeded estimates. The
news helped offset a larger-than-expected decline in crude supplies. The
benchmark February contract settled at $63.94 a barrel, up 57 cents.
Gold for February delivery recovered from early weakness to end higher,
amid continued bullish sentiment for the metal. The contract was up $4.40 at
$550.10 an ounce, off an early low of $541.
Treasurys ended lower after an auction of 5-year notes drew lackluster
demand, and as fixed-income traders digested by a monetary-policy speech by
New York Federal Reserve President Timothy Geithner.
While the Fed shouldn't hike rates to pop perceived asset bubbles, asset
price moves have become more important for the course of interest rates, said
Geithner, in remarks prepared for delivery to the New York Association for
Business Economics.
The benchmark 10-year Treasury note was last down 7/32 at 100 11/32,
yielding 4.46%.
On the currency markets, the dollar was lower against the euro and the
yen. The euro was up 0.5% at $1.2121. Against the Japanese yen, the greenback
fell 0.2% to 114.13.
The dollar has been under pressure due to strong signals that the Federal
Reserve is on the verge of wrapping up its current series of rate increases.
Dow stocks in focus
Shares of DuPont fell as much as 4.2% to a session low of $40.76 after the
chemicals manufacturer became the second Dow component after Alcoa Inc. to
disappoint investors on earnings. The company warned that its fourth-quarter
will not meet analysts' expectations due to hurricane-linked disruptions. The
stock pared losses to end the day, down $1.41, or 3.3% at $41.14.
Hewlett-Packard, also in the Dow, was 56 cents higher at $31.34. The
company got an upgrade from Prudential Equity, which noted positive cost
savings.
Johnson & Johnson was in focus after the New York Times said the drug
giant is considering a new bid for medical devices maker Guidant Corp.
The paper said Guidant's board has already met and declared Boston
Scientific Corp.'s $25 billion offer superior to Johnson & Johnson's original
$21.4 billion bid, a move which would have triggered a five-day deadline for
the pharmaceutical company to make a new offer. Johnson & Johnson shares fell
60 cents to $62.50. Boston Scientific's stock was off $1.07 at $25.41, while
shares of Guidant rose $1.05 to $70.44.
Other stock standouts
Shares in Apple Computer Inc. climbed 3.8% to $83.90 after brokers UBS
and Bank of America raised their price target on the maker of the iPod digital
music player. Shares in the company rallied Tuesday when Chief Executive Steve
Jobs announced December quarter revenue had outpaced estimates.
Yahoo Inc. was 2.6% lower at $41.87 after Merrill Lynch downgraded the
stock to neutral from buy, noting limited prospects for its Internal portal.
Genentech dropped 4.4% to $89.22 after its latest earnings report showed
unexpectedly light sales of its Avastin drug.
Mark Cotton is a reporter for MarketWatch in New York.
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