Stocks moved higher yesterday as the prospect of a good earnings season and lower fuel prices brightened Wall Street's mood. The Dow Jones industrial...
NEW YORK — Stocks moved higher yesterday as the prospect of a good earnings season and lower fuel prices brightened Wall Street’s mood.
The Dow Jones industrial average closed up 60.30 at 10,546.32.
Microsoft, one of the 30 Dow stocks, rose 43 cents to close at $25.10. Boeing, also a Dow stock, gained 58 cents to $59.01.
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The broader gauges also finished higher. The Standard & Poor’s 500 index rose 7.07 to 1,191.14. The Nasdaq composite index added 19.65 to 2,018.79.
While investors still seem to be taking a day-to-day approach, the lack of seriously bad news combined with easing oil prices boosted buyers’ confidence. Barring any negative surprises, analysts said the market’s path of least resistance, at least in the short term, could be to slowly trend higher.
“We see a lot more things right now pointing to the possibility of a higher market than we do to a panic sell-off,” said Bill Groenveld, head trader for vFinance Investments. “I think we’ll see a slow trend back up as earnings start to roll out, and some easier breathing with a softening in the oil prices.
Still, with expectations running high, “anything worse than pretty darn good earnings could have a psychologically negative impact,” he cautioned, and investors will be intensely focused on forward-looking forecasts.
There were also signs of further improvements in the labor market. The number of Americans applying for unemployment benefits dropped by 19,000 last week, the largest decline in two months, lowering the level of claims to 334,000 after they’d unexpectedly jumped by 23,000 last week. The four-week moving average, which smoothes out week-to-week volatility, dipped to 336,500.
Most important for equities, oil prices slid $1.74 to $54.11 on the New York Mercantile Exchange, following the lead of gasoline futures. The sell-off came as the U.S. Energy Department yesterday predicted that gasoline prices, now averaging $2.22 a gallon nationwide, would peak at about $2.35 a gallon this summer. Analysts noted that while demand remains strong, supplies are above last year’s levels.
“It’s very, very encouraging, especially at the beginning stages of earnings season, that we don’t have the oil cloud hanging over our head,” said Thomas Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. “If it holds at these levels going into earnings season … we could end up having a pretty good month.”
Earnings season got off to a strong start when Alcoa reported better-than-expected profits after the market closed Wednesday; its shares surged 5 percent, or $1.49, to $31.47.
Bed Bath & Beyond surged 11 percent, or $4.06, to $40.80, as strong sales growth helped its fourth-quarter earnings climb more than 25 percent year-over-year.