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.
15k by 2007
Behind every silver lining is some big dark cloud, eh?
Col. David Hunt was on Howie Carr's radio show today and he made a comment about the news "All it is is missing blondes in Aruba and rape allegations at Duke."
Halliburton
sounds like the same time I started (b1957) but real wages for folks in the lower wage areas are pretty stagnant
home prices are bubbling and quite high in desirable areas
gas is affecting folks bringing home less than 400 a week after taxes if they drive much
Now...had I been rich in 1980 and debt free, those 20% Munis would have been sweet
it's all a matter of perspective
my point is that the DJIA is not that universally indicative of great times by itself and we do have some negative trends
and that a lot of this...particularly indices are out of any POTUS's control except over from a distance and over the long run
and that of course the MSM would never credit Bush anyhow...they hate him...they let Toon get away with claiming credit for the internet fueled 90s boom
Interesting date.
I'm racking my brain, but I can't think of the significance. What happened on that date?
The Clinton administration entered its final year?
I'm not happy about gas prices, housing spikes and lulls in tax reform, or a FED continuing to ride hard on rates.
nor am I gleeful over increasing local taxation here in TN.
my point is that a good DJIA is just what it is...a good DJIA and largely is outside POTUS direct influence
and I am not poor btw....it's not a class thing, I'm not jealous of a good DJIA...it helps me personally quite a bit
I just see problems coming , the DJIA notwithstanding....we seem to be coming to a life of living with over 50 bucks a barrel oil and can't make any headway to produce more or open more refineries and we are exposed almost everywhere there is oil to be found from VZ to our Enviro wackos to the ME....one good stumble and we could be over 100 bucks a barrel
which is exactly what gave us the horror scenario Warren Pierce reminded us of upthread from 1980...the 70s oil crisis....that any Carter's awful fiscal spending and taxes...we are vulnerable and for folks like me carrying huge commercial mortgages, it's dangerous if my balloons hit during a spike like 1980
btw....i have argued with the goldbugs here for years that equities were the way to go...still believe that but we're close to a topout again....rememebr it took 6 years to get here...almost to a day....May 2005, I remember....I lost a bundle ...but mostly on the NASD...which may never get back to that mark in my lifetime again
Thats not completely accurate. The run up of the DOW-30 during the 90's did not come with the natural and needed retracements and consolidations.
If it did the 11K+ high would have not been that high.
In 2003, I did some work for a Bond Trader on Wall Street, he said the retracement needed to get down to about 7K +/- before it will be able to build a foundation.
He was right on. If you look at the charts now, there has been a step program and the advances have been built on earnings reports and not speculation.
But thats just my opinion and what do I know.SACRASM
Impossible, the stock market only goes up when Democrats are President, the same as the homeless only exist and good jobs are hard to find (regardless of the unemployment rate) when republicans are president.
Keep one very important fact in mind: Back in early 2000, at the peak of the Clinton Bubble, the price/earnings ratio on the Dow was over 40. Stocks were very expensive--highly overvalued, even those not in the tech sector, like the boring old Dow Jones Industrials. The Clinton good-times-phony-baloney-plastic-banana era of irrational exuberance was causing people to pay ridiculous prices for even mediocre companies.
That just couldn't last.
Today, the P/E ratio on the Dow is more like 18. Much closer to its historical average, and much closer to normal valuations.
For the Dow to be at 11,350 with an average P/E of 18 (not a fake, inflated P/E of 40) really says something.
wtf this is even better than during Clinton's term reffering to baby jumps in the Dow Jones as the signaling of the greatest economy in the last 50 yrs or so..
why is MSM so silent?
See my Post #53.
No market moves in a straight line. You don't get 10% average annual returns in the market without some really brutal negative years and some really stellar years.
The market was WAY overvalued at its peak in the Clinton Bubble years. Now the valuations are back down out of the clouds, and the market is still chugging along.
LOL! I love the humor at FR
the price of gas is the canary in our economic mineshaft. American consumer confidence is riding on the price of gas and the media is going to sink this administration with it. The Dims never collect responsibility for ignoring the energy supply forcast that Cheney's committee outlined 5 years ago. This trainwreck should be blamed on the Sierra Club and the Democratic Party.
:0)
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