US stocks gained, pushing the Standard & Poor's 500 Index to its third straight weekly advance, after a government report showed the economy lost fewer jobs than expected in April even as the unemployment rate rose.
The report was "not as bad as people might have feared; the market's looking at the glass half-full rather than half-empty," said Peter Coolidge, a money manager for Deltec Asset Management LLC. "It sort of goes with the postwar trend of people coming back into stocks."
PHOTO: AP
Computer-related shares including Microsoft Corp and Intel Corp lifted the Nasdaq Composite Index to a 10-month high amid analyst expectations that earnings will accelerate. Energy companies rose after ChevronTexaco Corp followed Exxon Mobil Corp in reporting a surge in profit because of higher oil and natural-gas prices.
PHOTO: AFP
The S&P 500 rose 13.78, or 1.5 percent, to 930.08, the highest level since Jan. 14. The Dow Jones Industrial Average added 128.43, or 1.5 percent, to 8582.68. The Nasdaq climbed 30.32, or 2.1 percent, to 1502.88, its highest since June 18.
Both the S&P 500 and Nasdaq, which also climbed for a third week, completed their longest weekly winning streaks since November, amid optimism that economic and profit growth will pick up following the end of the war with Iraq. The S&P 500 gained 3.5 percent, the Nasdaq jumped 4.8 percent and the Dow advanced 3.3 percent in the week.
More than three stocks rose for every one that fell on the New York Stock Exchange, the broadest rally since Jan. 2. Five stocks gained for every two that dropped on the Nasdaq Stock Market. Some 1.5 billion shares traded on the Big Board, a 12 percent increase over the three-month daily average.
US businesses cut 48,000 jobs last month as the unemployment rate rose to 6 percent, matching an eight-year high, the Labor Department said. Economists predicted a loss of 60,000 jobs and a jobless rate of 5.9 percent, according to a < "The market was discounting the worst," said David Briggs, head of trading at Federated Investors Inc, which manages US$185 billion in Pittsburgh. "People seem to be willing to wait a little longer to see if things continue to improve." Technology shares contributed the most to the S&P 500's gain. Analysts predict profit at these companies will rise 33 percent this quarter and 67 percent next quarter, according to Thomson Financial. The third-quarter figure is the highest among the benchmark's 10 industry groups. Microsoft, the world's largest software maker, rose US$0.42 to US$26.13. Intel, the No. 1 semiconductor maker, added US$0.50 to US$19.05. Sun Microsystems Inc, a maker of server computers that run corporate networks, climbed US$0.41 to US$3.75, and was the most active stock. Speculation that Dell Computer Corp., International Business Machines Corp. or Hewlett-Packard Co. may acquire the company led to the gain, said Giga Information Group analyst Rob Enderle. Sun shares have lost more than 90 percent of their value during the past three years. Sun and IBM spokespeople declined to comment. Dell and Hewlett-Packard spokespeople didn't return calls. Cypress Semiconductor Corp. jumped US$1.12 to US$10.60. The maker of chips used in Sony Corp.'s PlayStation 2 video-game machine said second-quarter sales will fall to US$200 million from US$202.1 million a year ago. Analysts were expecting a steeper drop, according to Thomson Financial. BEA Systems Inc, whose software runs Web-based programs, rose US$1.09 to US$11.87. Lehman Brothers Inc analyst Neil Herman said the company had a "very solid" first quarter and may have beaten his earnings estimate of US$0.07 a share by a penny. ChevronTexaco, the No. 2 US oil company, rose US$2.35 to US$65.35. Its first-quarter profit excluding certain items more than doubled to US$1.99 a share. On that basis, analysts surveyed by Thomson Financial had expected US$1.81 on average. Earnings were the highest since Chevron Corp bought Texaco Inc in 2001. Exxon Mobil, the world's biggest publicly traded oil company, gained US$0.56 to US$36.04. The company yesterday said its profit tripled last quarter as oil prices rose 56 percent on average and gas prices doubled in the period. Airline stocks surged after Merrill Lynch & Co analyst Michael Lindenberg said their losses may narrow in 2003 and the threat of bankruptcy for some companies has diminished. He boosted his rating on five carriers, propelling the Amex Airline Index to a 11 percent gain -- its biggest in more than a month. Alaska Air Group Inc gained US$2.06 to US$19.77, Continental Airlines Inc surged US$1.94 to US$11.80, Delta Air Lines Inc climbed US$1.75 to US$14.75, Frontier Airlines Inc added US$1.36 to US$7.62 and Northwest Airlines Corp rallied US$1.30 to US$9.85. Lindenberg upgraded them to "buy" from "neutral." United Technologies Corp, the maker of Pratt & Whitney jet engines, added US$1.74 to US$63.40. Boeing Co, the world's largest planemaker, rose US$1.51 to US$28.62. The two stocks, along with IBM, accounted for a quarter of the Dow average's advance. Cigna Corp, the third-largest US health insurer, dropped US$2.87 to US$50.78. It said profit declined 14 percent last quarter as premiums rose less than medical costs. The company also lost customers. Unilever NV's US shares tumbled US$6.22 to US$57.07. The world's biggest maker of household products said first-quarter sales of its top brands, such as Knorr soups, grew less than it had forecast. S&P 500 futures expiring in June gained 12.40 to 927.40 on the Chicago Mercantile Exchange. June futures on the Nasdaq-100 Index jumped 25.50 to 1139.00. The index, a benchmark for Nasdaq's largest companies, rose 23.30 to 1136.51. Nasdaq-100 tracking shares, known by their QQQ ticker, gained 59 cents to US$28.28. The S&P 500 shares known as Spiders added US$1.31 to US$93.21. The Russell 2000 Index of smaller stocks rose 8.84, or 2.2 percent, to 407.67. The Wilshire 5000 Total Market Index, the broadest measure of US shares, gained 135.66, or 1.6 percent, to 8834.06. Based on changes in the Wilshire, the total value of US stocks increased by US$162.8 billion.
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