Wall Street overcame its recent caution Wednesday, with a raft of acquisitions propping up stocks and lower-than-expected gross domestic...
NEW YORK — Wall Street overcame its recent caution Wednesday, with a raft of acquisitions propping up stocks and lower-than-expected gross domestic product (GDP) growth easing inflation fears.
The Dow Jones industrial average rose 28.18 to 10,833.73. The Dow had been more than 94 points higher earlier in the session.
Microsoft, one of the 30 Dow stocks, fell 13 cents to close at $26.73 a share. Boeing, also a Dow stock, fell 35 cents to $70.39.
Broader stock indicators also rose. The Standard & Poor’s 500 index climbed 3.17 to 1,262.79, while the Nasdaq composite index added 9.24 to 2,231.66.
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Acquisitions in the technology and pharmaceutical industries promised to reinvigorate those lagging sectors. Google, Seagate Technologies and IBM announced major purchases, while Allergan said it will buy Inamed.
While final third-quarter GDP was lower than anticipated, with the economy growing at an annualized rate of 4.1 percent instead of the expected 4.3 percent, investors welcomed the news as another sign that the Federal Reserve would be hard-pressed to continue raising interest rates. The 4.1 percent growth rate was considered strong.
Despite the good news, stocks saw a downturn in afternoon trading, giving up more substantial gains from earlier in the session. While stocks are not expected to give up the year’s modest gains, a further substantial push higher remains in doubt.
“We’re definitely picking up some momentum … , but that’s not really translating into any sense of urgency,” said Hugh Johnson, chairman and chief investment officer at Johnson Illington Advisors in Albany, N.Y. “People are content to hold on to some cash and not be fully invested.”
Crude-oil futures were little changed after the Energy Department reported a slight rise in the nation’s crude-oil stockpiles. A barrel of light crude was quoted at $58.55, down a penny, on the New York Mercantile Exchange.
With six trading days to go before 2006, the year likely will end with modest gains, as opposed to 2004’s strong year-end rally. However, that could make early 2006 a little better.
“We sold off pretty heavily in January coming off last year’s rally, and I don’t think we’ll see as much of that in 2006,” said Joseph Battipaglia, chief investment officer at Ryan Beck. “This year’s start could be a little more bullish, and you still have lots of companies sitting on a lot of cash that can be put to use in 2006.”