U.S. stocks rise for third day as IBM, tech lead
LOS ANGELES (MarketWatch) -- U.S. stocks extended gains into a third session Thursday as better-than-expected earnings from
European progress on approving a Spanish aid package to banks also bolstered stocks.
The Dow Jones Industrial Average (DJIA) ended up 34.66 points, or 0.3%, to 12,943.36, after a rocky session that saw the benchmark climb by nearly 69 points and also spend part of the day lower.
IBM (IBM) was the top percentage gainer and point contributor in the blue-chip index, where 15 of 30 components ended higher. IBM shares rose 3.8% after it reported strong quarterly results and raised its outlook. Read more on IBM's forecast.
Thursday's session "essentially is being driven by earnings. There was heavy negativity on earnings given the overall dour global economic environment, and it turns out that earnings have actually been relatively good," said Michael Yoshikami, chief executive and founder of Destination Wealth Management in Walnut Creek, Calif.
Advancers edged past decliners on the New York Stock Exchange, where about 756 million shares traded hands. NYSE composite volume was 4 billion.
The indexes reached their highs of the session after Germany's lower house of parliament approved the country's participation in a $122.9 billion aid package for Spain's ailing bank sector, according to news reports. Worries about a banking and fiscal crisis in Spain have dogged global equities markets for much of the second quarter. Read more on Spain.
U.S. economic data were a drag, however. U.S. stocks had shed most gains midmorning after the Philadelphia Federal Reserve said an index tracking regional manufacturing activity improved to a negative 12.9 reading in July. That was still short of the rise to a negative 6.8 forecast in a MarketWatch poll and marked the third straight monthly reading below zero, indicating a contraction. Read more on Philly Fed.
The market on Thursday had been "bouncing around a range. The economic data have varied," but the Federal Reserve and other central banks remain the overshadowing factor in the markets, said Doug Roberts, chief investment strategist at Channel Capital Research.
"In the U.S., we have some reassurance from [Federal Reserve] Chairman Bernanke that if economic data fall off a cliff, he's going to be in there to protect everyone's back. But nobody wants to go too heavily against the market because if they do, they are afraid that if there are positive sounds coming from the central bank, they could get killed."
Tech stocks, as in Wednesday's session, were a source of strength. The tech-heavy Nasdaq Composite (COMP) advanced 23.30 points, or 0.8%, to 2,965.90.
The Standard & Poor's 500 index (SPX) gained 3.73 points, or 0.3%, to 1,376.51, with tech gaining the most. Telecoms and financials lagged.
Among the best-performing,
Morgan Stanley "obviously had a miss," said Yoshikami, "but other earnings seems to be coming in at least okay and I think that has surprised the markets."
Among the day's other data disappointments, the Conference Board said an index of leading economic indicators fell in June after a May increase and was worse than expected. Sales of existing homes fell 5.4% in June, the National Association of Realtors said. Before the bell, the Labor Department said jobless claims shot up. Read more on leading indicators and on home sales.
Ahead of the opening bell, the Labor Department reported that U.S. jobless claims rose 34,000 last week to 386,000. Claims tend to be volatile in July due to summertime fluctuations in car-industry employment. Read more on jobless claims.