Dow industrials close above 12,800 for first time
EmptyNEW YORK -- The Dow Jones industrial average closed above 12,800 for the first time Wednesday, signaling Wall Street's recovery from its steep decline in February as investors rewarded companies with strong earnings.
The day was not a standout for the overall market, however. Technology stocks lagged following disappointing earnings from leaders including Yahoo Inc.
The Dow moved as high as 12,838.46 before slipping back slightly to close at 12,803.84, breaking records set on Feb. 20, one week before the average tumbled 416 points in a worldwide selloff.
As only 11 of the 30 stocks in the blue chip index advanced, the Dow's gain Wednesday came from strength in stocks like JP Morgan Chase & Co., Boeing Co. and Caterpillar Inc.
JPMorgan lifted the Dow after the bank reported a 55% jump in profits that far surpassed Wall Street's expectations. The companies that make up the Dow -- nearly half of which report earnings this week -- have been mostly beating the Street's predictions.
Broader stock indicators finished mixed. The Standard & Poor's 500 index rose 1.02, or 0.07%, to 1,472.50, but the Nasdaq composite index fell 6.45, or 0.26%, to 2,510.50.
Bond prices rose for the third straight session as investors grew optimistic that the Federal Reserve won't raise interest rates. The yield on the benchmark 10-year Treasury note fell to 4.66% from 4.69% late Tuesday. Gold prices also advanced.
Investors pulled back from tech stocks after Yahoo posted a surprising 11% drop in its first-quarter profit. Disappointing results from International Business Machines Corp. and Motorola Inc. added to the selling.
Wall Street was uneasy about a sharp drop in the dollar, which is now at 26-year lows against the British pound and a two-year low against the euro. The U.S. currency has weakened because interest rates have remained steady since the summer and amid signs of a slowing U.S. economy.
Light, sweet crude settled up 3 cents at $63.13 per barrel on the New York Mercantile Exchange as a government report showed a bigger-than-expected decline in gasoline inventories. The U.S. Energy Information Administration said stockpiles dropped 2.7 million barrels to 197 million barrels.
Investors are focused on earnings reports as they look for a direction in stocks. S&P has predicted earnings for companies in the S&P 500 grew less than 4% in the first quarter, much less than in previous quarters.
Yahoo plunged $3.78, or 11.8%, to $28.31 after the Internet portal reported disappointing results late Tuesday. The results left Wall Street wondering how much longer it will take the company to regain its financial footing after it stumbled through most of 2006.
Pressure was felt elsewhere in the tech sector. IBM posted disappointing results late Tuesday, and its shares dropped $2.32, or 2.4%, to $94.80. Hard driver maker Seagate Technology LLC fell 85 cents, or 3.8%, to $21.30 after it reported profit fell 22% in the first quarter, and lowered its forecast.
Motorola reported a first-quarter loss due to sluggish sales, and charges to cover a legal settlement and restructuring efforts. However, sales surpassed expectations and the stock rose 27 cents to $18.22.
Medical device maker Abbott Laboratories Inc. fell 97 cents to $58.03 after it said its first-quarter profit fell 19%. The results excluding certain items, however, beat analyst estimates.
JPMorgan rose $1.89, or 3.8%, to $52.07 after the nation's third-largest bank reported a 55% increase in profits. The New York-based bank said first-quarter results were boosted by strength across its primary business lines, though it did increase reserves to offset subprime mortgage losses.
Declining issues led advancers 9 to 7 on the New York Stock Exchange, where volume came to 1.61 billion shares compared with volume of 1.57 billion shares traded Tuesday.
The Russell 2000 index of smaller companies fell 4.58, or 0.55%, to 824.38.
Overseas, Japan's Nikkei stock average closed up 0.80%. Britain's FTSE 100 finished down 0.74%, Germany's DAX index fell 0.90%, and France's CAC-40 dropped 0.38%.
South Korean and Australian stocks hit new records Wednesday, while the sometimes-volatile Shanghai Composite index edged up 0.01%. It was a nearly 9% drop in the Shanghai Composite index on Feb. 27 that helped trigger the day's global selloff. Indexes like the Shanghai Composite, however, took less time to resume hitting highs than did major U.S. indexes.