AP News, January 23rd, 2007
Wall Street rebounded Tuesday as rising oil prices helped propel energy company stocks higher and offset a dim outlook from telecommunications maker Alcatel-Lucent.
Exxon Mobil Corp. led blue chips and was among the Dow Jones industrials' biggest gainers as investors bet that a cold snap in the northeastern United States would increase energy demand. Fellow oil companies ConocoPhillips and Chevron Corp. also rose.
The energy sector's gains helped alleviate some of the pressure on the market from earnings reports. Bank of America Corp., chemical maker DuPont Co., and Johnson & Johnson all tumbled after reporting fourth-quarter results earlier in the session.
However, there was some optimism about technology issues on strong results from United Technologies Corp. and Texas Instruments Inc.
"Earnings are not coming in all that bad," said Brian Gendreau, an investment strategist with ING Investment Management. "There is an absence of any real bad news, leading indicators are up, and companies are not falling off the table. That's consistent with the modest rise in the Dow."
In early afternoon trading, the Dow rose 63.61, or 0.51 percent, to 12,540.77.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 6.96, or 0.49 percent, at 1,429.91, and the Nasdaq composite index added 10.05, or 0.41 percent, to 2,441.12.
Bond prices fell, with the yield on the benchmark 10-year Treasury note rising to 4.79 percent from 4.76 percent late Monday.
In economic news, a Richmond Fed Survey showed a slip in its manufacturing index this month. Meanwhile, the Conference Board said U.S. economic activity is set to increase slightly in the coming months.
The dollar was mixed against other major currencies, while gold prices spiked. A barrel of light, sweet crude rose $1.13 to $53.71 on the New York Mercantile Exchange.
As has been typical in previous sessions, oil companies got a boost on the rebound in crude prices. Exxon Mobil rose $1.12 to $74.03; ConocoPhillips was up $1.30, or 2.1 percent, at $64.68; and Chevron increased $1.35, or 2 percent, to $72.58.
This helped investors shake off Alcatel-Lucent's statement that it will not turn a profit in the first quarter since the company was created with last year's $11.6 billion deal between France's Alcatel and Lucent of the U.S. The company blamed integration costs and weaker sales because of consolidation among its customers.
Alcatel-Lucent fell $1.17, or 8.2 percent, to $13.03. Rival Tellabs Inc. rose 9 cents to $10.11 after despite reporting a plunge in sales caused profit to fall 68 percent during the latest quarter.
However, technology stocks were up overall after chip maker Texas Instruments reported a robust quarterly profit and was upgraded by several Wall Street firms. Shares rose $1.23, or 4.3 percent, to $29.82.
United Technologies, which makes everything from air conditioners to aircraft engines, reported fourth-quarter profit rose 38 percent, which sent shares up $2.10, or 3.3 percent, to $66.22.
Bank of America shares fell 48 cents to $53.17 after the nation's biggest retail bank reported growth in its loan business and its acquisition of credit-card issuer MBNA Corp. helped boost profit during the latest quarter. Rival Wachovia Corp. shares rose 11 cents to $56.38 despite posting better-than-expected results.
DuPont posted higher quarterly earnings that met Wall Street forecasts, but investors were concerned about how the impact of higher raw materials costs will impact the chemical maker. Its stock fell 83 cents to $49.27.
The Russell 2000 index of smaller gained 9.99, or 1.28 percent, to 787.95.
Advancers outpaced decliners by a 4 to 3 margin on the New York Stock Exchange, where volume was 887.8 million.
Overseas, Japan's Nikkei stock average closed down 0.08 percent. In afternoon trading, Britain's FTSE 100 was up 0.15 percent, Germany's DAX index dropped 0.13 percent, and France's CAC-40 shed 0.08 percent.
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