BusinessWeek.com
October 23, 2006
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Dow Hits Another New High
AT&T's solid profits countered a wider-than-expected loss from Ford. Also in focus: Wal-Mart's analyst meeting
Stocks finished higher Monday, as the Dow hit another new all-time closing high amid positive Wal-Mart (WMT) news and a torrent of earnings news. Investors were looking ahead to Wednesday's Federal Reserve policy statement and Friday's report on third-quarter economic growth.The Dow Jones industrial average rose 114.54 points, or 0.95%, to 12,116.91, its best-ever close, after touching a new intraday record of 12,125.16. The broader Standard & Poor's 500 index added 8.42 points, or 0.62%, to 1,377.02. The tech-heavy Nasdaq composite climbed 13.26 points, or 0.57%, to 2,355.56, boosted by Google (GOOG) and Apple (AAPL).
NYSE breadth was positive, with 19 issues advancing for every 14 declining. Nasdaq breadth was 16-15 positive.
Earnings season kicked into high gear Monday. Ford (F) was lower after the automaker reported a wider third-quarter loss of $5.8 billion, missing Wall Street estimates.
Dow component AT&T (T) was modestly higher after the telecom giant beat analyst expectations with a 74% increase in third-quarter profit.
Copier and printer maker Xerox (XRX) posted a sharp increase in third-quarter earnings, topping analyst forecasts.
Oilfield service conglomerate Halliburton (HAL) also trumped projections with a 22% rise in third-quarter profit.
Quarterly results were on tap after the bell from Amgen (AMGN), American Express (AXP), and Texas Instruments (TXN). Among companies due to report Tuesday were Altria (MO) and DuPont (DD).
Other companies reporting this week include General Motors (GM), Exxon Mobil (XOM), Microsoft (MSFT), and Chevron (CVX).
Outside of earnings, Wal-Mart was higher as the retailer said it plans slower expansion in capital spending and retail space in 2007. Separately, the company's attempt to obtain a banking license was reportedly running into opposition from lenders, the Fed, labor unions, and others.
Elsewhere, IBM (IBM) filed two patent infringement lawsuits against Internet retailer Amazon (AMZN).
On the M&A front, private-equity groups were reportedly partnering up to ready offers for newspaper publisher Tribune (TRB).
The economic calendar was relatively quiet Monday, though the week's slate holds the Fed's interest-rate meeting, third-quarter results for gross domestic product, and new and existing September home sales.
In the energy markets, December West Texas Intermediate crude futures fell 52 cents to $58.81 a barrel amid skepticism over whether OPEC will abide by its recent output cut.
European markets finished higher. In London, the FTSE-100 index rose 10.9 points, or 0.18%, to 6,166.1. Germany's DAX index added 40.09 points, or 0.65%, to 6,242.91. In Paris, the CAC 40 index advanced 36.46 points, or 0.68%, to 5,411.46.
Asian markets ended mixed. In Japan, the Nikkei 225 index gained 137.19 points, or 0.82%, to 16,788.82. In Hong Kong, the Hang Seng index lost 23.7 points, or 0.13%, to 18,089.85. Korea's Kospi index nudged higher 0.71 points, or 0.05%, to 1,364.95.
Treasury Market
Treasury prices declined amid speculation the Fed may have to resume increasing rates in 2007, says Standard & Poor's Equity Research. The 10-year note fell in price to 100-13/32 for a yield of 4.83%, while the 30-year bond dropped to 93-03/32 for a yield of 4.95%.
