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Dow ends at record on profits

Dow ends at record on profits
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First Published: Wed, Jul 18 2007. 09 01 AM IST
Updated: Wed, Jul 18 2007. 09 01 AM IST
New York: The Dow closed at a record on Tuesday (17 July), though retreating from the 14,000 mark it earlier crossed for the first time, while the Nasdaq rose to a six-and-a-half-year high on a cascade of stronger-than-expected earnings.
But weakness in energy stocks and lingering worries about the subprime mortgage market held back the advance of the broader S&P 500, which closed virtually unchanged.
A brokerage upgrade of American Express pushed the credit-card company’s stock up 4.6% and helped lift the Dow average of 30 blue-chip stocks.
Semiconductor stocks gained after Novellus Systems reported stronger-than-expected results.
“Earnings that have come out so far have been supporting the market. There have been no big disappointments,” said Subodh Kumar, investment strategist at Subodh Kumar & Associates in Toronto.
The Dow Jones industrial average gained 20.57 points, or 0.15%, to end at 13,971.55. The Standard & Poor’s 500 Index inched down just 0.15 of a point, or 0.01%, to finish at 1,549.37. The Nasdaq Composite Index rose 14.96 points, or 0.55%, to close at 2,712.29, after climbing intraday to 2,719.94, its highest in six-and-a-half years.
The Dow set an intraday record high of 14,021.95, crossing 14,000 just under three months since it rose above the 13,000 mark for the first time, and then retreated before the close.
“This is a typical bull market in that it is climbing a wall of worry -- there continues to be Iraq, terrorism, inflation and high interest rates, and still the market goes up,” said Carl Birkelbach, founder, chairman and CEO of Birkelbach Investment Securities, Inc., in Chicago.
In trading after the closing bell, shares of Internet media company Yahoo fell 1.9% to $27 after it reported a dip in quarterly profit in line with previously lowered expectations. Intel, the largest maker of computer processors, dropped nearly 5% to $25.05 in extended-hours trading after it posted a rise in second-quarter earnings, but missed its gross margin goal.
Exxon and Merrill Lynch deflate
In regular trading, energy stocks fell, led by Exxon Mobil on concern about dwindling profit margins for gasoline. Exxon shares slipped 0.7% to $89.09.
Worries about the subprime mortgage market also continued to rumble.
Merrill Lynch was among companies that posted earnings that exceeded estimates, but its stock erased early gains after its chief financial officer said in a conference call that the market for subprime collateralized debt has yet to stabilize. Its shares slipped 1.4 percent to $86.20.
Money machines in high gear
Other financial companies whose earnings topped forecasts were State Street Corp., Jefferies and KeyCorp. The gains helped push the the S&P financial index up 0.5%.
Shares of State Street, the world’s biggest institutional money manager, added 2.1% to $71.87. Jefferies shares rose 3.6% to $29.75, while KeyCorp gained 4.6 % to $36.71.
Trading was moderate on the NYSE, with about 1.44 billion shares changing hands, below last year’s estimated daily average of 1.84 billion.
On the Nasdaq, about 2.22 billion shares traded, above last year’s daily average of 2.02 billion.
Declining stocks outnumbered advancing ones by a ratio of about 19 to 14 on the NYSE, while advancers slightly outnumbered decliners on Nasdaq.
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First Published: Wed, Jul 18 2007. 09 01 AM IST
More Topics: Money Matters | Global Markets |