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.
Great idea!
To be fair, and play devil's advocate, it can be viewed as stagnation over 6 years, in that it dipped and just returned to its high. You would expect about 10% growth each year, on average, and with compounding, you're looking at up 77%... So, even though that's somewhat aggressive, the Dow, by those (admittedly somewhat lofty) standards, the Dow should be at the 18,000 level by now...
I know, I know, that's simplistic as it doesn't account for 911, etc...
You forgot global warming.
I blame Bush
Sorry, folks, I couldn't resist
Clinton-induced recession and 9/11 but you'd never know it from listening to the libs and MSM
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Oh you will, but it will only happen after a dem is living off of the prosperity which was created by the republican/capitalistic administration put in place before them. Then they will take credit for everything like Clinton did.
it's very nice for most investors
but inflationary home prices
high gas
and fairly stagnant wages for lower wage earners
all sorta dim the DOW bulb
I'm happy but some kid starting out at 30K a year may be less so
that the MSM doesn't care is no surprise...a GOP is in office
IT IS ALL, I MEAN ALL, ABOUT GAS AND OIL PRICES WITH 99.99% OF AMERICANS RIGHT NOW. NOTHING ELSE MATTERS. GAS AND OIL PRICES
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this is also true when it comes to elections.. and if not kept in check, the gas prices will torpeedoe the economy. That is a fact.
This Bud's for us!
If Bush can take credit for the DJIA rise then will he have to take credit for it's fall if it occurs?
Clinton presided over a stock boom the likes we've never seen but I never gave him credit ..no way.
I do think POTUS can create a good environment over two terms but a lot of this is out of his hands...largely.
If it makes you feel any better, the XOM stock that made me a bundle last week has been slipping back, this week. :)
Worst economy since...Clinton.
You are correct, and this is HUGH and series. Unsure about Soros, but somebody HUGH is pulling some golden strings somewhere...
LOL!
Just checked my 401K and other retirement/stock accounts . . . let's just say I have a BIG smile on my face!
[THANK YOU President Bush! . . . Hubby and I are finally getting back to where we were in 1999 BEFORE Clinton/Reno decided to 'take down' Microsoft/the NASDAQ and half our net worth with it!!]
Off goes the TV. Will wait for Tony to be on with Brit before I put the set on again.
its the economy stupid
wardaddy,when I entered the workforce, unemployment was around 8%, interest rates were pushing 20%, young men lined up at the military recruiter's office because there were just no jobs for anybody, much less young people, at the time. I would have LOVED today's economy when I was 20.
Hmm.. 6 minutes apart.. bad lag?
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