Confident investors, buoyed by positive earnings reports from the financial sector and bullish corporate outlooks for 2005, returned to the market yesterday after weeks of uncertainty...
NEW YORK — Confident investors, buoyed by positive earnings reports from the financial sector and bullish corporate outlooks for 2005, returned to the market yesterday after weeks of uncertainty, pushing stocks sharply higher.
The Dow Jones industrial average rose 70.79 to 10,628.79.
Microsoft, one of the 30 Dow stocks, advanced 20 cents to close at $26.32 a share. Boeing, also a Dow stock, gained 97 cents to $51.88.
Broader stock indicators moved substantially higher. The Standard & Poor’s 500 index was up 11.46 at 1,195.98, and the Nasdaq composite index gained 18.13 to 2,106.04.
Most Read Stories
- Seattle No. 1 in home-price growth again; starter homes require half of income
- Costco is testing a new burger in Seattle, and it might remind you of Shake Shack
- Elizabeth Warren: ‘The next step is single-payer’ health care
- UW study finds Seattle’s minimum wage is costing jobs
- Zillow vs. McMansion Hell: Seattle company not backing off fight with blog despite PR fiasco
With hundreds of companies reporting earnings this week and next, investors were cheered by results from Bank of America, Wells Fargo and others, even as earnings from Dow component 3M disappointed Wall Street.
This week’s earnings reports will give Wall Street a much clearer picture of the economy, analysts said, and even more investors could be drawn back into the market if earnings reports and forecasts for the year ahead remain strong.
“I think there’s a bias toward optimism on the part of investors, but mostly it’s just wait and see,” said Hugh Johnson, chief investment officer at First Albany. “We’ve had good earnings, but it’s only this week that we’ll be getting into the real heart of earnings season.”
It was the first time in 2005 that the Dow, S&P and Nasdaq enjoyed back-to-back gains, having risen in Friday’s session. The markets were closed Monday for Martin Luther King Jr. Day.
A dip in crude futures also helped the buying. Oil prices topped $49 per barrel in early trading, but slumped by midday and fell below $48 by the afternoon. A barrel of light crude settled at $48.38, unchanged from the previous session, on the New York Mercantile Exchange.
“I think you saw a handful of investors deciding that the S&P, in particular, had gone down far enough and decided to place some big bets, and that started us off toward positive territory,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “And that move, with earnings going well and oil prices falling, kind of cascaded to the point we’re at now.”
The strong earnings reports from the financial sector led to optimism that the Federal Reserve — seeing confidence in corporate America and some strength in the dollar over the past week — would not abandon its gradual pace in raising interest rates.