April 21, 2007 in Business

Stocks up sharply; Dow near 13,000

Associated Press The Spokesman-Review
 

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NEW YORK — Wall Street bounded higher Friday, hurtling the Dow Jones industrial average to a record close approaching 13,000 as investors celebrated a week of surprisingly strong earnings reports. The major indexes all had their third straight winning week, their longest such streak since October.

Investors who had tempered their expectations for first-quarter earnings on Monday were energized by the initial wave of upbeat results. So far into the earnings season, 16 of the 30 Dow components have posted financial results for the first three months of the year — with 10 surpassing analyst forecasts. Dow components Honeywell International Inc., Caterpillar Inc., Pfizer Inc., and McDonald’s Corp. all reported earnings Friday.

Better-than-expected results allowed stocks to extend their best April rally in four years, and one that pushed the Nasdaq composite index and the Standard & Poor’s 500 index to six-year highs.

“It’s not a matter of 13,000 for the Dow, we could be looking at 14,000 by the end of the year,” said Robert Froehlich, chief investment strategist for investment firm DWS Scudder. “There’s too much money out there chasing too few companies. This story isn’t ending anytime soon.”

The Dow closed up 153.35, or 1.20 percent, at 12,961.98, after setting a new intraday high of 12,966.29. The blue chip index — now about 38 points shy of 13,000 — has hit 34 record closes since the beginning of October last year.

The S&P 500 index soared 13.62, or 0.93 percent, to 1,484.35, and the Nasdaq rose 21.04, or 0.84 percent, to 2,526.39. The Nasdaq, badly beaten down since its peak of 5,048.62 in early 2000, now stands at just over 50 percent of that record.

For the week, the Dow surged 2.8 percent, the S&P 500 added 2.2 percent, and the Nasdaq rose 1.4 percent. Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 3.29 billion shares, compared to 2.94 billion on Thursday.

Bonds held steady as many investors focused on stocks. The yield on the benchmark 10-year Treasury note was unchanged at 4.67 percent. The dollar was mostly lower against other major currencies, while gold prices spiked.

Oil prices rose ahead of the presidential election in Nigeria, which is Africa’s top producer of crude. A barrel of light sweet crude rose $1.55 to settle at $63.38 on the New York Mercantile Exchange.

Friday’s advance brought fresh highs for several market indexes, indicating that the advance was more broad-based than simply a strong showing by the Dow industrials. Among the indexes setting records, the Dow Jones transportation average closed at a record level, as did the Dow Jones utilities average. The Wilshire 5000 composite index, a free-float weighted index that measures 5,000 U.S. based companies, closed above 15,000 for the first time Friday. The Russell 3000 index, which represents about 98 percent of the U.S. market, on Friday registered its fourth record close for the week.

Wall Street’s advance signaled its recovery from the Feb. 27 worldwide plunge in stocks that sliced 416 points from the Dow. On Wednesday, the blue chips set their first new closing and intraday highs since Feb. 20.

The Russell 2000 index of smaller companies was up 9.54, or 1.16 percent, at 828.86.

Overseas, Japan’s Nikkei stock average closed up 0.42 percent. Britain’s FTSE 100 was up 0.72 percent, Germany’s DAX index rose 1.38 percent, and France’s CAC-40 advanced 1.88 percent.


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