- Obama shortens sentence of inmate from Cape (1/19/17)9
- Business notebook: Jackson salon owner also opens a clothing store (1/16/17)
- Area hospitals hope a box helps prevent infant deaths (1/19/17)6
- Jackson police describe night of anger, car crashes, drug possession by 18-year-old (1/22/17)5
- Two subjects of interest in 1992 homicide to take polygraph tests (1/15/17)8
- Meat-processing plant faces $70K penalty for Clean Water Act violations (1/17/17)4
- Cape SportsPlex contractor offers a look at the project (1/15/17)14
- Local students to perform with choir at inauguration (1/19/17)3
- Southeast to lose $3.5 million from state in budget cuts (1/18/17)21
- Subjects of interest in 1992 killing take polygraph tests; results not revealed (1/18/17)2
Positive earnings lead to 239-point Dow jump
NEW YORK -- Another wave of positive earnings news from companies such as IBM propelled stocks higher Thursday, giving Wall Street its fifth advance in six sessions. The Dow Jones industrials jumped 239 points.
Analysts said investors were becoming more optimistic after a week of good news from General Electric to Advanced Micro Devices, despite Wednesday's steep decline. A belief that stocks were oversold after hitting multiyear lows last week is adding to the good mood.
"I think economy-wise the worst days have passed," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. "We are very likely in a phase where stocks are catching up from the bottoming of the economy several quarters ago."
The Dow Jones industrial average climbed 239.01, or 3 percent, to close at 8,275.04, more than wiping out Wednesday's drop of 220 points. Since Oct. 9, blue-chip stocks have surged 988.77 points.
The broader market also finished sharply higher. The Nasdaq composite index rose 39.87, or 3.2 percent, to 1,272.29. The Standard & Poor's 500 index gained 19.18, or 2.2 percent, to 879.20.
IBM rose $7.30, or 11.3 percent, to $72.20. Late Wednesday, the technology giant reported third-quarter earnings that beat analysts' expectations by 3 cents a share and reaffirmed its fourth-quarter outlook, prompting Merrill Lynch to upgrade the company's stock.
Investors also took heart from a government report Thursday showing housing construction rebounding strongly in September to a 16-year high, and shook off two other surveys indicating a dip in industrial production and a jump in jobless claims.
The Commerce Department reported that construction rose by 13.3 percent to a seasonally adjusted annual rate of 1.84 million, the highest level since June 1986.
However, the Federal Reserve said that production at the nation's factories, mines and utilities dropped by 0.1 percent in September, following a 0.3 percent drop in August. Output at factories also fell for the second month in a row, dropping by 0.3 percent.
And the Labor Department reported that new jobless claims rose last week by 22,000 to 411,000, another sign of the sluggish employment market.
"Investors have only been responding to the negative numbers. Now, eyes are being open to the positive numbers," Freeman said.
Analysts said Wednesday's pullback was expected after a four-day rally helped end six straight weeks of sell-offs. They remained hopeful that the market could continue its advance with more third-quarter earnings reports, which overall are expected to beat expectations.
"We think the confidence is coming back, the accounting scandals are past us, the banks are reporting better-than-expected results, and the balance sheets are slowly being cleaned up," said Jason R. Graybill, senior portfolio manager and managing director at Abner, Herrman & Brock Asset Management.
Still, analysts acknowledged lingering uncertainties about the strength of the economic recovery as well as a possible war with Iraq. Wednesday's selling intensified after President Bush signed a congressional resolution allowing him to use force against Iraq.
"We think the bottom from last week ... is really going to be the lows in the markets. But we don't see a runaway on the upside," Graybill said.