Stocks tottered higher yesterday as a slide in oil prices and upbeat earnings news eclipsed an unexpectedly steep drop in durable goods...
NEW YORK — Stocks tottered higher yesterday as a slide in oil prices and upbeat earnings news eclipsed an unexpectedly steep drop in durable goods orders that raised questions about the strength of the economy.
The Dow Jones industrial average closed up 47.67 at 10,198.80 after dropping 91 points on Tuesday.
Microsoft, one of the 30 Dow stocks, rose 23 cents to close at $24.99 a share. Boeing, also a Dow stock, gained 66 cents to $59.66.
The broader gauges also rebounded. The Standard & Poor’s 500 index added 4.64 to 1,156.38. The Nasdaq composite index gained 2.99 to 1,930.43.
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Analysts were pleased by the advance, noting that the market had been oversold in the previous session amid anxiety over corporate results and the broader economic picture. But some observers felt the uptick lacked conviction, and predicted a continuation of the volatility that has dogged stocks so far during this earnings season.
“Earnings season is always volatile,” said Michael Murphy, head trader at Wachovia Securities in Baltimore, noting that historically, April has been the worst month of the year for stocks “The bias seems to be to the upside today, and if we continue to get good news the market can move higher. But I still think it’s likely to remain volatile through the end of the week.”
Oil plummeted $2.59 to $51.61 on the New York Mercantile Exchange in electronic trading following the government’s weekly inventory report, which showed a 5.5 million barrel increase in crude supplies, but a 300,000 barrel draw on gasoline; analysts had been hoping for a build.
The falling price of oil cheered investors, who had been deeply worried by the Commerce Department’s report that orders to U.S. factories for durable goods — big-ticket items that last three years or more — had plunged 2.8 percent in March. Some drop was expected after three months of declines, but the reading was far weaker than economists had expected. It renewed concerns that the economy may be entering another “soft patch” as consumers and businesses, jolted by hefty fuel prices, cut back spending.
Analysts were less alarmed, however, saying the data reduced the likelihood that the Federal Reserve would take a more aggressive approach to raising short-term interest rates when the policy makers meet next week.
“Some of the numbers and evidence suggest the cyclical expansion is not as strong as people believe, but it is still resolutely good,” said Subodh Kumar, chief investment strategist for CIBC World Markets. “I think that what is happening is the markets are readjusting to more moderate growth.”