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Technology and retail stocks fuel rally
Kevin Plumberg
Reuters
New York, New York, U.S.
Thursday, 10 April 2008, 4:31PM EDT
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Traders on the floor of the New York Stock Exchange, 18 March 2008. - Photo: Brendan McDermid, Reuters
Stocks rose on Thursday after a brokerage upgrade of chip makers lifted technology stocks and on optimism that poor March sales may have been the low point for retailers this year.
Intel Corp shares jumped 3% and helped lift all three major U.S. stock indexes after Banc of America Securities upgraded the U.S. semiconductor sector, saying a modest inventory buildup has eased.
Retail shares rose as investors bet the business environment will improve should the current downturn reverse as expected in the second half of the year. The sector posted its weakest March monthly sales results for U.S. retailers in 13 years.
Shares of Wal-Mart climbed 1% after the world's largest retailer raised its outlook, citing expense controls and fewer markdowns. The stock gained in spite of Wal-Mart posting March same-store sales growth that fell short of Wall Street's expectations.
Tech shares also got a lift after JPMorgan Securities raised its profit forecasts on Apple Inc. The iPod maker's stock rose 2% and contributed the most to the Nasdaq 100's advance.
"If you're optimistic about growth in the second half, then what is tied to growth and most successful in times of growth? Technology," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.
The Dow Jones industrial average was up 54.72 points, or 0.44%, ending the day at 12,581.98. The Standard & Poor's 500 Index was up 6.06 points, or 0.45%, finishing at 1,360.55. The Nasdaq Composite Index was up 29.58 points, or 1.27%, at 2,351.70.
General Electric Co rose 0.9% and was the second-biggest boost to the S&P on expectations that economic strength outside the United States would support the conglomerate's bottom line. GE closed at $36.75 on the NYSE.
An easing in lending markets since mid-March when the Federal Reserve backed JPMorgan Chase's takeover of Bear Stearns has comforted investors, who have been slowly regaining confidence in stocks.
Many investors have become more certain that the U.S. economy would slip into a recession during the first six months of 2008, but this has actually helped the stock market to recover.
"It is good because we have moved from totally unknown territory to one where we think we know what is going on," said Jan Loeys, global head of asset allocation with JPMorgan, on a conference call.
Wal-Mart's stock ended at $54.66, up 52 cents, or 1% on the New York Stock Exchange.
The Dow industrials also benefited from a positive outlook from an economic bellwether, DuPont Co.
DuPont's stock climbed 1.2% to $49.64 on the New York Stock Exchange after the chemical company raised its profit outlook and said strong growth in its agriculture businesses and emerging markets should help offset weakness in U.S. housing and automotive markets. For details, see
Adding to investor confidence, Goldman Sachs Group Inc Chief Executive Lloyd Blankfein said on Thursday that financial markets are likely in the late stages of the credit crisis that began last summer.
Intel's stock gained 3.1% to $22.08 on the Nasdaq.
Apple shares rose 2.1% to $154.55 after JPMorgan Securities raised its second-quarter and 2008 estimates for the company.
Volume on the New York Stock Exchange was modest with 1.29 billion shares changing hands, down from last year's daily average of 1.90 billion shares. On Nasdaq, 2.20 billion shares traded, slightly above last year's daily average of 2.17 billion.
Advancers beat decliners by a ratio of about 5 to 3 on the NYSE. On Nasdaq, about three stocks rose for every two that fell.
