Stocks boosted by earnings reports Durable goods orders surge in December; oil ticks lower
By Mark Cotton, MarketWatch Last Update: 10:30 AM ET Jan. 26, 2006
NEW YORK (MarketWatch) -- U.S. stocks gained ground Thursday, buoyed by a string of strong earnings performances from Dow components Caterpillar Inc, Verizon Communications, AT&T Inc. and Honeywell International.
General Motors Corp., however, was a black spot on the blue-chip index as its shares tumbled after the struggling carmaker reported a quarterly loss of nearly $5 billion.
The Dow Jones Industrial Average ($INDU: Dow Jones Industrial Average News, chart, profile, more Last: 10,779.06+69.32+0.65%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $INDU10,779.06, +69.32, +0.6%) was last up 58 points at 10,766. With these early gains, the Dow is once again in positive territory for the year.
The Nasdaq Composite Index ($COMPQ: Nasdaq Composite Index News, chart, profile, more Last: 2,272.53+11.88+0.53%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $COMPQ2,272.53, +11.88, +0.5%) rose 7 points to 2,267 while the S&P 500 Index ($SPX: S&P 500 Index News, chart, profile, more Last: 1,271.42+6.74+0.53%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $SPX1,271.42, +6.74, +0.5%) climbed 5 pointss to 1,269.
"The earnings news has given us a little confidence and there was good news on the economic with durable goods orders and jobless claims coming in a little better than expected," said Robert Pavlik, portfolio manager at Oaktree Asset Management.
Pavlik said it was still too early to say whether the stock market was back on an upward trend.
"It's headed in the right direction. But we need get past all this Treasury refunding," said Pavlik, referring to the recent sell-off in Treasurys that has pushed up long-term interest rates.
On the broader market for equities, advancers outpaced decliners by 9 to 5 on the New York Stock Exchange, and by nearly 2 to 1 on the Nasdaq.
By sector, banks ($BKX: phlx kbw bank index bkx News, chart, profile, more Last: 103.89+1.30+1.27%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $XBD211.29, +3.01, +1.4%) and computer software stocks ($GSO: CBOE Gsti Software Index News, chart, profile, more Last: 170.86+2.31+1.37%
10:58am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $GSO170.86, +2.31, +1.4%) put in the most significant gains.
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $NWX243.23, -3.55, -1.4%) and oil services stocks ($OSX: phlx euro style oil svc index osx News, chart, profile, more Last: 207.00-4.32-2.04%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $OSX207.00, -4.32, -2.0%) were two of the sectors posting the biggest declines.
Volume was 408 million on the Big Board, and 546 million on the Nasdaq.
Economic reports add to market cheer
The Commerce Department reported that orders for U.S.-made durable goods rose 1.3% in December despite a large decline in aircraft orders. The 1.3% gain was stronger than the 0.5% expected by economists surveyed by MarketWatch. See full story.
Jobless claims in the latest week rose 11,000 to 283,000. Economists surveyed by MarketWatch expected an increase to 305,000.
Oil, gold, bonds, dollar
Crude futures dipped in morning action. The front-month contract last was down 25 cents at $65.60 a barrel.
Gold futures were backing lower, although analysts remained upbeat about the metal's overall outlook.
"With generally favorable world equity market action over the last several sessions, and a lot of talk about new commodity funds getting involved in the metals, we have to think that the trend in gold will continue to point to the upside," Nell Sloane, an analyst at NSFutures.com said in daily commentary
The benchmark March contract was last down $4.70 at $557.80 an ounce. See Metals Stocks
Treasury prices declined, pushing yields higher, after an unexpectedly strong rise in durable goods orders built a case for the Federal Reserve to keep lifting rates.
The benchmark 10-year note was down 8/32 at 99 29/32, with its yield at 4.51% ($TNX: CBOE 10-Year Treasury Yield Index News, chart, profile, more Last: 45.21+0.42+0.94%
10:59am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $TNX45.21, +0.42, +0.9%) , up from 4.479% in late trade Wednesday. The yield last breached 4.5% in mid December.
The dollar was little changed in morning trading, after recently being pummeled by worries about an approaching end to the Federal Reserve's rate hikes program.
The dollar rose 0.1% to 115.92 yen. The euro was virtually flat against the greenback at $1.2243.
Five Dow stocks report earnings
General Motors (GM: General Motors Corporation News, chart, profile, more Last: 22.50-1.35-5.66%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: GM22.50, -1.35, -5.7%) was one of only a handful of Dow components trading lower, down 4.8% at $22.70, after the world's largest automaker saw its fourth-quarter loss balloon to nearly $5 billion as the weak performance of its North American operations continued to weigh. See full story.
GM's stock, however, has climbed nearly 20% over the last three sessions. The rise can in part be explained by news that billionaire investor Kirk Kerkorian recently bought 12 million shares in the struggling carmaker, bringing his stake in the company back to 9.9%, according to a Wednesday filing with the Securities and Exchange Commission. See full story.
Caterpillar Inc. (CAT: Caterpillar Inc. News, chart, profile, more Last: 62.33+0.26+0.42%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: CAT62.33, +0.26, +0.4%) , also in the Dow, traded at a record high, up 2.1% at $63.40. The company's quarterly profit vaulted more than 50% on demand for construction and mining machinery. See full story.
Honewell International (HON: honeywell intl inc com News, chart, profile, more Last: 36.45+0.39+1.08%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: HON36.45, +0.39, +1.1%) rose 11 cents to $36.17 after the maker of industrial equipment lifted the low end of its 2006 earnings outlook in the wake of quarterly results that met Wall Street expectations. Read More
Rival telecom operators and fellow Dow components AT&T (T: AT&T Inc. News, chart, profile, more Last: 25.31+0.10+0.40%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: T25.31, +0.10, +0.4%) and Verizon Communications (VZ: verizon communications com News, chart, profile, more Last: 31.42+0.04+0.13%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: VZ31.42, +0.04, +0.1%) also offered up earnings that topped analyst estimates.
AT&T, formerly known as SBC Communications, tacked on 8 cents to $25.29 after the company posted a sharply higher quarterly profit citing strong growth in its wireless and high-speed Internet operations. See full story.
Verizon shares (VZ: verizon communications com News, chart, profile, more Last: 31.42+0.04+0.13%
10:38am 01/26/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: VZ31.42, +0.04, +0.1%) rose 25 cents to $31.63 as its wireless division also contributed strongly to an in-line quarterly performance. The company said it added 613,000 DSL high-speed Internet customers, setting an industry record for quarterly growth. Read More
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