Stocks end higher following strong earnings
EmptyNEW YORK -- Stocks rose soundly Friday, capping a strong week for Wall Street, as investors drew confidence from strong results at Oracle Corp. and a continued sense that lower interest rates should help bolster the economy.
The expiration of futures and options contracts made for heavier trading than the markets generally have seen in recent weeks.
Oracle's report that quarterly profits rose 25% as sales grew at their fastest pace in seven years offered fresh evidence that some sectors of the economy continue to hum along even as areas such as housing cause consternation for many investors.
Wall Street found renewed optimism this week after the Federal Reserve lowered interest rates a larger-than-expected one-half percentage point Tuesday. The central bank also lowered the rate it charges to lend directly to banks by the same amount.
"As much as we often underestimate the depth of our problems it's also natural for us to underestimate the depth and robustness of our economy. There are many industry segments that are very healthy," said Robert Brown, chief investment officer at Genworth Financial Asset Management, pointing to stronger-than-expected earnings reports. He contended while Wall Street's exuberance over the Fed's rate cuts is understandable, investors are blithely looking past some of the concerns the economy faces.
According to preliminary calculations, the Dow Jones industrial average rose 53.49, or 0.39%, to 13,820.19.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 6.97, or 0.46%, to 1,525.72, while the Nasdaq composite index rose 16.39, or 0.64%, to 2,671.22.
Friday's session brought "triple-witching," a once-a-quarter occurrence when investors face simultaneous expiration of contracts for stock index futures, index options and stock options. Such days usually bring higher-than-normal volume as investors jockey for new positions.