Stocks soar on strong earnings reports
NEW YORK — Stocks staged a stunning rebound Thursday as investors snapped up shares on unexpectedly strong earnings from companies including Nokia Corp. and Motorola Inc., and the surprising news that the New York Stock Exchange plans to merge with electronic trader Archipelago Inc. The Dow Jones industrial average soared more than 200 points, its best day in two years.
Bargain-minded buyers jumped back into the market a day after concerns about inflation sent stocks sharply lower. Thursday’s session began with brisk trading, which some analysts worried wouldn’t last, but with money flowing out of bonds, Wall Street grew more confident about the prospects for equities after last week’s heavy losses.
“Obviously the market is oversold when you get multiple days of 100-point sell-offs,” said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. “I think the market got flushed out … everybody was frightened. When everyone starts seeing the glass as half-empty, it’s just panic in the streets. But once we get through earnings, I just see nothing but gradual upside for the rest of ‘05.”
The Dow surged 206.24, or 2.06 percent, to 10,218.60, reversing course after a 115-point drop Wednesday, and a 374-point decline last week. It was the Dow’s largest one-day gain since April 2, 2003, when the blue chips closed 215.20 points higher.
The broader gauges also posted significant advances. The Nasdaq composite index soared 48.65, or 2.54 percent, to 1,962.41, its best one-day gain since Nov. 24, 2003, when it closed up 53.26 points. The Standard & Poor’s 500 index added 22.45, or 1.97 percent, to 1,159.95, its best one-day showing since March 17, 2003, when it climbed 29.52.
As stocks rose, Treasury prices declined, with the yield on the 10-year note rising to 4.30 percent, up from 4.19 percent late Wednesday. The dollar was up against other major currencies; gold was mixed. Crude oil settled 17 cents higher at $54.20 on the New York Mercantile Exchange.
Despite the day’s robust trading, however, some analysts were reluctant to declare an end to the slide that started last week, warning that the market has had a hard time sustaining its rallies.
“The market is still jittery,” said Jay Suskind, head trader at Ryan Beck & Co. “You’re seeing strong earnings numbers, there’s good visibility on the corporate side, but lousy macro-economic numbers for March, and that’s the big quandary. I think we need really another month or so of macro numbers to know whether March was just an economic soft patch, or not.”
All areas of the market posted gains, according to the exchange-traded funds that track the nine sectors of the S&P. The top performers were energy, which rose 3.45 percent; industrials, up 2.67 percent; and technology, up 2.7 percent.
Google Inc., which rose 3.1 percent, or $6.12, to $204.22 in regular trading, beat Wall Street estimates after the bell with a nearly six-fold surge in profits.
Advancers outnumbered declining issues by about 3 to 1 on the New York Stock Exchange. Preliminary consolidated volume came to 2.3 billion shares, compared with 2.22 billion traded Wednesday.
The Russell 2000 index, which tracks smaller company stocks, was up 14.02, or 2.40 percent, at 598.98.
Overseas, Japan’s Nikkei stock average slid 0.94 percent. In Europe, France’s CAC-40 rose 0.03 percent, Britain’s FTSE 100 fell 0.05 percent and Germany’s DAX index was up 0.36 percent.