Wall Street: Thursday close

By THIS IS MONEY
Updated:

 

Wall Street vaulted to its biggest gain in two months as the world's two biggest companies trumped the numbers game. General Electric and Microsoft sparked a broad rally which swept the Dow Jones Industrial Average higher by 237.97 points or 2.32% to 10,478.99. The Nasdaq Index snapped back 103.70 points or 5.26% to 2,075.70.

The stronger than expected earnings reports from the world's number one and two companies broke a string of dismal profit statements. General Electric reported a 15% jump in profits even while revenues fell 2.7% in the latest quarter. GE's shares leapt $2.39 or 5.4% to $47. Microsoft surged $5.10 or 7.7% to $71.60 after it said software sales were running ahead of expectations.

Motorola, the wireless telephone maker, jumped $2.48 or 16% to $18.15 as it beat analysts' forecasts and internet company Yahoo! firmed $1.23 or 7.22% to $18.26 as it losses came in lower than expected.

'I think there will be some positive short-term direction to this market,' said Ned Riley, chief investment strategist at State Street Global Advisors. 'But whether we can sustain it through the third quarter may be problematic.'

More fodder for the rally came after the close of trading when chipmaker Advanced Micro Devices and computer processer maker Juniper Networks reported results ahead of lowered expectations. Advanced Micro Devices strengthened $1.58 or 7.5% to $22.70 in regular trading. Juniper Networks was higher by $3.94 or 16% to $28.47.

The rosier view of company profits overshadowed a report from the Labour Department which showed weekly unemployment claims leaping a surprising 42,000 to 445,000, the highest level in nine years. Economists said the number was swollen by workforce dislocations as car companies retool.

And more signs of alarm that Argentina might default on its $130b. in borrowings might have acted as a positive, rather than a negative for US markets, analyst said. They cited a 'flight to safety' into US stocks and bonds by Latin American investors.

The share buying spree ran across virtually all sectors with the beaten down techs attracting a lot of interest. Cisco Systems jumped $1.16 or 7% to $17.86, Intel added $2.04 or 7.3% to $30.10, Oracle was marked up $1.66 or 9.2% to $19.66 and Sun Microsystems recovered $1.37 or 10% to $15.35. IBM tacked on $3.40 or 3.3% to $107.25. Hewlett-Packard was higher by $1.23 or 4.8% to $27.02.

Retailers were bid up. Wal-Mart, which reported a 6.9% jump in June sales, improved $3 or 6.1% to $51.85. Do-it-yourself leader Home Depot tacked on $2.29 or 5% to $48.

Among Dow components, American Express added $1.19 or 3.2% to $38.52, Boeing rose $1.60 or 3% to $54.50, Citigroup firmed $1.10 or 2.3% to $48.70 and JP Morgan Chase was higher by 49c or 1.2% to $42.54.

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