Posted on 04/26/2006 2:17:59 PM PDT by xcamel
NEW YORK (Reuters) - Stocks ended higher on Wednesday, with the Dow industrials hitting a 6-year high, buoyed by stronger-than-expected earnings from companies such as top brewer Anheuser-Busch Cos. and a key broker's dropping its "sell" rating on General Motors Corp.
The latest string of results in a stronger-than-forecast earnings season overshadowed investors' worries about rising interest rates after orders in March for durable goods such as airplanes and refrigerators surpassed expectations.
Anheuser-Busch reported stronger-than-expected earnings, sending its shares up 5.3 percent, or $2.27, to $44.90 on the New York Stock Exchange. For details see: .
Top U.S. brokerage Merrill Lynch & Co. upgraded General Motors Corp. to "neutral," saying it sees early signs of a turnaround, and making GM the Dow's top gainer as it rose 7.9 percent, or $1.70, to $23.11. .
"The consensus going into the quarter was that earnings were going to (rise) somewhere north of 10 percent and they have handily beat expectations," said Joe Liro, an economist and market strategist with Stone & McCarthy Research Associates, who pinned the rising markets on Wednesday on the flow of positive earnings news.
The Dow Jones industrial average <.DJI> ended up 71.24 points, or 0.63 percent, at 11,354.49, its highest close since January 19, 2000. The Standard & Poor's 500 Index <.SPX> closed up 3.67 points, or 0.28 percent, at 1,305.41. The Nasdaq Composite Index <.IXIC> finished up 3.33 points, or 0.14 percent, at 2,333.63.
Government data showed orders for durable goods — manufactured items meant to last three years or more — surged
in March, reviving worries the Federal Reserve would continue to raise rates into the second half of the year to cool a sizzling economy and ward off inflationary pressures.
Stocks also extended Wednesday's upward swing after a report showed a 13.8 percent jump in new home sales in March, which far exceeded expectations.
The Dow Jones index of home builders' stocks <.DJUSHB> rose 1.6 percent. That mirrored gains in stocks such as Toll Brothers Inc. , up 1.1 percent, or 36 cents, at
$33.30.
Weakness in biotech shares limited the Nasdaq's gains.
Shares of Gilead Sciences Inc. , a biopharmaceutical company whose drugs include HIV virus and bird flu treatments, fell 6.7 percent, or $4.11, to $57.31.
Analysts said there was concern that Gilead's royalties for flu drug Tamiflu for the year may not meet expectations.
Shares of AT&T Inc. and BellSouth Corp. , which own Cingular Wireless, and Verizon Communications , which owns Verizon Wireless with Vodafone Group Plc , all rose and helped lead the S&P 500 higher on Wednesday after Sprint Nextel Corp. , the No. 3 U.S. wireless service, reported results below expectations and fed concerns it is losing market share to its bigger rivals.
AT&T rose 2.2 percent, or 56 cents, to $26.16, while BellSouth was up 2.1 percent, or 69 cents, at $33.74. Shares of Verizon rose 1.8 percent, or 58 cents, to $33.08. All are traded on the NYSE.
While the broader stock market appears to be taking the spike in bond yields in stride, one group is taking it on the chin: utilities. The S&P 500's utilities index <.GSPU> is down by about 1 percent for a second straight day and is now the second-worst performer, behind health care <.GSPA>, in the index for the year.
Utilities pay the largest dividend yields over any other stock market sector and become less appealing when bond yields rise and become more competitive.
The 10-year U.S. Treasury note's yield hit 5.13 percent during the day — its highest in about four years. Late in the day, the 10-year note's yield was 5.11 percent, up from 5.07 percent on Tuesday, while its price was down 9/32 late Wednesday at 95-11/32.
The United States have little impact on global oil prices. The last figure I heard is that we use 13% of the world's oil.
13% is not enough to give extaordinary economic power, hell, half the suppliers are ready to shift to Euros instead of dollars anyways.
That's good to know for all of you out there who buy a lot of cores.
BUMP
The price you see on the street is for gasoline, not oil.
The price of oil is part of the cost of a gallon of gas.
Shalom.
I make the same point to friends about the high cost of fuel in Canada and their healthy economy, and Canada is a net exporter of oil. American media never refer to Canadian or British gasoline prices because those facts might diminish the hysteria which is being used in our election season to beat up on incumbents - who are Republicans.
So, what's more realistic? 8% a year? Anything lower than that, and you're better off getting into Treasuries or munis, where the spread between the 8% and the Tsy or tax-free munis, in most environments, doesn't justify the risk of investing in equities. Even at 8% a year, the Dow would have been up over 50% since 2000, with compounding.
Even if you go back to the turn of the century, the average increase in the Dow was 7.4%, which would be about 53% up over 6 years. http://www.zealllc.com/commentary/century.htm
For the record, I think the economy's in great shape, I'm certainly not knocking it. I'm also a huge Bush supporter. For those that have ever read my posts, you'll know the only knocks I've had against Bush, consistently, is his failure to address the lies being thrown at him. Otherwise, while I don't agree with every policy, he's doing a solid job overall.
If it weren't for FR, I wouldn't know because I don't pay attention to the drive by media. I purposely try to avoid anything they are reporting. And when I do happen to hear them, it's usually nothing good.
we must have started work about the same year...
Willie Green is deeply saddened.
(We are really slipping here at FR)
You should change your userid to novetoes.
Don't hand me your whining about it. I lived in Germany for 10 years of my military time. I know why the gas prices in euro are higher and it comes down to one thing and ONE THING ONLY: YOUR BLASTED TAXES FOR YOUR SOCIAL WELFARE AND SOCIALIZED MEDICINE PROGRAMS. Nothing else. You elected the socialist, I didn't. Live with it. You vote for it, you get it. You got what you voted for. Whine to someone who doesn't know the truth. I do.
"The last figure I heard is that we use 13% of the world's oil. "
Your figure isn't accurate.
In 2004, domestic production of 5.4M barrels/day was 13% of the world's total production.
But our consumption is more than 25% of the world's oil and about 45% of the world's gasoline - and we harbor just 5% of the world's population.
http://www.gravmag.com/oilessay.html
Thanks. I stand corrected. It was a figure I heard on the radio the other night, and truthfully, it sounded a bit weak to me when I heard it.
Nope, what you're doing is comparing apples with giraffes; not even oranges.
Words have set meanings; you can't use them willy nilly, to make your point, when what a word means, doesn't mean what you want it to mean.
I dont get it. Wheres all the money being made?
Heck yeah! The bird flu is gonna kill us all! LOL!
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