NEW YORK (Reuters) - Stocks rose on Thursday, hoisting Nasdaq to an 11-month closing high, as investors focused on positive comments and profits from technology companies instead of weak reports on the U.S. economy.
Ahead of the open, the U.S. producer price index (news - web sites) showed that wholesale prices posted their biggest drop on record last month as energy costs plunged, adding to concerns over possible deflation, a widespread decline in prices that hits profits.
But stocks rose, lifted by technology shares like computer heavyweight International Business Machines Corp. (NYSE:IBM - news), up 1.3 percent after encouraging comments by its chief executive on market conditions, and chip maker Analog Devices Inc. (NYSE:ADI - news), which gained 3.5 percent after it said profits soared.
Such news helped underpin sentiment on Wall Street, which has enjoyed a big rally since mid-March on hopes for stronger corporate and economic growth later in 2003. The benchmark S&P 500 (^SPX - news) had its highest close in nearly nine months.
"In the past the market has led the economy rather than trailed it, so maybe the market in fact is saying that we are through the worst," said Ray Rund, head of research at Shaker Investments. "But this could also be a rally within a bear market."
The tech-laced Nasdaq Composite (^IXIC - news) rose 16.48 points, or 1.07 percent, to 1,551.38, its highest close since June 2002. The blue-chip Dow Jones industrials (^DJI - news) gained 65.32 points, or 0.76 percent, to 8,713.14. The Standard & Poor's 500 (.SPX) advanced 7.39 points, or 0.79 percent, to 946.67, ending at its highest level since late August 2002.
Advancers outpaced decliners by a ratio of 5 to 3 on the New York Stock Exchange (news - web sites) and 3 to 2 on Nasdaq. Big Board trading was active at more than 1.4 billion shares and heavy on the Nasdaq, which saw more than 1.9 billion issues change hands.
Dow stock IBM rose $1.19 to $89.89 after its chief executive said demand for technology has stabilized relative to a year ago. Analog Devices jumped $1.24 to $35.24 after the company posted a five-fold increase in quarterly earnings, citing strong global sales of chips used in cell phones.
"The market is being pushed higher more on the news of individual corporate profits and comments like IBM's rather than the economic backdrop, which is mixed at best," said Brett Mitstifer, senior portfolio manager at Value Line Asset Management, which oversees $4 billion.
But he said Wall Street also got some signs business conditions may be on the mend. One was an early report that factories in New York State ramped up activity and hired workers in May. Another was a drop in the weekly number of Americans filing for first-time unemployment benefits.
INTUIT, COMPUTER ASSOCIATES RALLY
More good tidings in the high-tech sector came from Intuit Inc. (Nasdaq:INTU - news), up $2.83, or 7.3 percent, to $41.81, after the TurboTax software maker posted a quarterly profit that more than doubled from a year ago.
Shares of Computer Associates International Inc. (NYSE:CA - news) jumped $2.07 to $20.26, or 11.4 percent. The software company posted a narrower net loss and said its first-quarter and full-year earnings would beat estimates.
Target Corp. (NYSE:TGT - news) sank $1.47, or 4.1 percent, to $34.46 and other retailers followed suit. Target reported a slight rise in net income, shy of many analysts' already lowered expectations. The S&P retail index (^RLX - news) fell
Ahead of the open, the U.S. producer price index (news - web sites) showed that wholesale prices posted their biggest drop on record last month as energy costs plunged, adding to concerns over possible deflation, a widespread decline in prices that hits profits.
But stocks rose, lifted by technology shares like computer heavyweight International Business Machines Corp. (NYSE:IBM - news), up 1.3 percent after encouraging comments by its chief executive on market conditions, and chip maker Analog Devices Inc. (NYSE:ADI - news), which gained 3.5 percent after it said profits soared.
Such news helped underpin sentiment on Wall Street, which has enjoyed a big rally since mid-March on hopes for stronger corporate and economic growth later in 2003. The benchmark S&P 500 (^SPX - news) had its highest close in nearly nine months.
"In the past the market has led the economy rather than trailed it, so maybe the market in fact is saying that we are through the worst," said Ray Rund, head of research at Shaker Investments. "But this could also be a rally within a bear market."
The tech-laced Nasdaq Composite (^IXIC - news) rose 16.48 points, or 1.07 percent, to 1,551.38, its highest close since June 2002. The blue-chip Dow Jones industrials (^DJI - news) gained 65.32 points, or 0.76 percent, to 8,713.14. The Standard & Poor's 500 (.SPX) advanced 7.39 points, or 0.79 percent, to 946.67, ending at its highest level since late August 2002.
Advancers outpaced decliners by a ratio of 5 to 3 on the New York Stock Exchange (news - web sites) and 3 to 2 on Nasdaq. Big Board trading was active at more than 1.4 billion shares and heavy on the Nasdaq, which saw more than 1.9 billion issues change hands.
Dow stock IBM rose $1.19 to $89.89 after its chief executive said demand for technology has stabilized relative to a year ago. Analog Devices jumped $1.24 to $35.24 after the company posted a five-fold increase in quarterly earnings, citing strong global sales of chips used in cell phones.
"The market is being pushed higher more on the news of individual corporate profits and comments like IBM's rather than the economic backdrop, which is mixed at best," said Brett Mitstifer, senior portfolio manager at Value Line Asset Management, which oversees $4 billion.
But he said Wall Street also got some signs business conditions may be on the mend. One was an early report that factories in New York State ramped up activity and hired workers in May. Another was a drop in the weekly number of Americans filing for first-time unemployment benefits.
INTUIT, COMPUTER ASSOCIATES RALLY
More good tidings in the high-tech sector came from Intuit Inc. (Nasdaq:INTU - news), up $2.83, or 7.3 percent, to $41.81, after the TurboTax software maker posted a quarterly profit that more than doubled from a year ago.
Shares of Computer Associates International Inc. (NYSE:CA - news) jumped $2.07 to $20.26, or 11.4 percent. The software company posted a narrower net loss and said its first-quarter and full-year earnings would beat estimates.
Target Corp. (NYSE:TGT - news) sank $1.47, or 4.1 percent, to $34.46 and other retailers followed suit. Target reported a slight rise in net income, shy of many analysts' already lowered expectations. The S&P retail index (^RLX - news) fell
