Stocks shook off early losses and closed higher yesterday after Federal Reserve Chairman Alan Greenspan delivered an upbeat assessment of...
NEW YORK — Stocks shook off early losses and closed higher yesterday after Federal Reserve Chairman Alan Greenspan delivered an upbeat assessment of the economy and Wall Street focused on solid earnings reported by more companies.
The Dow Jones industrial average rose 42.59 to 10,689.15.
Microsoft, one of the 30 Dow stocks, added 3 cents to close at $26.19. Boeing, also a Dow stock, soared $1.19 to $66.08.
Broader stock indicators also ended higher.
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The Standard & Poor’s 500 rose 5.85 to 1,235.20, its best close since July 2, 2001.
The Nasdaq composite index rose 15.39 to 2,188.57, moving into positive territory for the year and reaching its highest point since June 18, 2001.
The market opened lower as investors punished Intel and Yahoo! after their earnings reports, issued after the markets closed Tuesday, fell below analysts’ expectations.
Stocks briefly slid further after Greenspan told Congress the economy should enjoy sustained growth with low inflation in coming months, a sure sign incremental interest-rate boosts would continue.
But the sell-off didn’t stick, because additional rate increases have long been expected. The market tends to fall when Greenspan starts talking and to gain when he’s done, said Todd Leone, managing director of equity trading at SG Cowen Securities.
“It’s the uncertainty” that pushes stocks down, Leone said. “You never know what he’s going to say, but today he said what everyone expected.”
Investors also reconsidered the flow of earnings, which have been positive aside from a few high-profile disappointments.
Crude-oil prices dropped more than $1 a barrel at one point after the Energy Department’s weekly data on petroleum reserves was better than expected. A barrel of light crude settled at $56.72, down 74 cents on the New York Mercantile Exchange.
Investors pummeled the day’s losers. Intel fell $1.27 to $27.44 after it reported strong earnings but a gross margin below analysts’ forecasts.
Investors also ignored Yahoo!’s stellar earnings, instead focusing on how the results missed analysts’ lofty expectations. The stock fell $4.33 to $33.40.