HP, Home Depot lift Dow

  • Business
  • Sunday, 13 Jul 2003

By Vivian Chu

NEW YORK: US stocks ended higher on Friday as a bullish call on computer and printer maker Hewlett-Packard Co and a brokerage firm’s upgrade of retailer Home Depot lifted the blue-chip Dow. 

Earlier on Friday, stocks gained after a reassuring earnings outlook from General Electric Inc fed investors’ optimism that more companies would report positive profit news in the coming weeks. But GE’s shares, the second most active on the New York Stock Exchange, gave up earlier gains to close down 7 cents at US$28.12. 

Many market players spent the trading day bracing for next week’s deluge of quarterly earnings, when many of corporate America’s biggest names will report results. 

“You’re rolling into the summer doldrums weekend, and a lot of the industry is out,” said Will Porter, director of equity trading at Roth Capital Partners in Newport Beach, California. “Everyone's expectations of earnings are pretty high right now.” 

The Dow Jones industrial average ended up 83.55 points, or 0.92%, at 9,119.59. The broader Standard & Poor’s 500 Index rose 9.44 points, or 0.95%, at 988.14. The technology-laced Nasdaq Composite Index advanced 18.07 points, or 1.05%, to 1,733.93, based on the latest available figures. 

Volume was moderate, with about 1.2 billion shares changing hands on the New York Stock Exchange and about 1.5 billion shares traded on the Nasdaq. Advancers outnumbered decliners by a ratio of about 11 to 5 on the Big Board, and by about 5 to 3 on the Nasdaq. 

Friday’s gains cemented a second straight up week for the three major stock indexes. For the week, the Nasdaq climbed 4.2%, while the Dow average rose 0.5% and the S&P 500 gained 1.3%. 

Hewlett-Packard was the Dow’s biggest percentage gainer for the day, ending up 81 cents, or 3.67%, at US$22.86, after Prudential Financial initiated research coverage with a “buy” rating. 

Home Depot ranked as the Dow’s second-biggest percentage gainer, ending up 74 cents, or 2.28%, at US$33.17. Shares of Home Depot, the world’s largest home improvement retailer, rose after Banc of America upgraded its shares to “buy” from “neutral.” 

Wall Street’s mood got a lift from remarks from GE’s Chairman Jeffrey Immelt, who said earnings would rise between 3% and 7% this year. 

The forecast came after GE cut the top end of its 2003 profit forecast and said its second-quarter earnings fell 14%, in line with analysts' forecasts. 

“GE’s earnings came in line, and they didn’t say anything earth shattering,” said Mike Driscoll, a managing director at Bear Stearns. 

“The mindset of a lot of investors right now is not so much on the individual numbers, but expectations that companies will either meet or exceed the earnings estimates.” 

In economic news, surging energy costs pushed the US Producer Price Index up a steeper-than-expected 0.5%. But the core PPI, excluding volatile food and energy prices, unexpectedly fell 0.1%, the government said. 

In another report, the government said the US trade deficit held near-record levels in May as exports struggled to show growth, underscoring the weak global economy. –Reuters  

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