November 21, 2006
Stocks Drift Higher as Google Hits Milestone
Shares of the Internet search company topped $500 for the first time, while Boeing won a $5.5 billion contract. The economic docket was quietMajor stock indexes finished modestly higher in light pre-holiday trading Tuesday, with no major economic reports on the docket this session and no corporate news to rival Monday's mega-deals.
On Tuesday, the Dow Jones industrial average nudged higher 5.05 points, or 0.04%, to 12,321.59, capped by weakness in General Motors (GM). The broader Standard & Poor's 500 index rose 2.31 points, or 0.16%, to 1,402.81. The tech-heavy Nasdaq composite added 2.12 points, or 0.09%, to 2,454.84, amid weakness in Intel (INTC).
NYSE breadth was positive, with 21 issues gaining for every 13 declining. Nasdaq breadth was flat.
Investors' appetite for risk may have increased. The VIX index, a closely watched barometer of volatility expectations, closed below 10 on Monday for the first time since 1994, Standard & Poor's Equity Research notes.
In corporate news, Boeing (BA) was higher on news Korean Air Lines ordered 15 passenger aircraft and 10 freighters in a deal worth $5.5 billion.
Internet search giant Google (GOOG) was higher as shares in the company rose above the $500 mark for the first time.
A few companies were still reporting quarterly results as earnings season winds down. Deere (DE) was higher after the farm and lawn-equipment maker reported a 19% rise in profit for its fiscal fourth-quarter but said it sees slower sales this year.
Fast-food chain Jack in the Box (JBX) was higher after the company posted a 54% jump in fiscal fourth-quarter earnings and said it would buy back up to 5.5 million common shares in a modified "Dutch auction" tender offer for a maximum price of $335.5 million.
Shares of Nordstrom (JWN) gained after the retailer clocked a 26% earnings increase in the third quarter, beating expectations.
Borders (BGP) and J. Crew (JCG) were set to post earnings after the closing bell.
Elsewhere, Dow Chemical (DOW) was lower after Merrill Lynch cut its rating on the company from neutral to sell.
Medtronic (MDT) was sharply higher as J.P. Morgan upgraded the stock from neutral to overweight after the company reported higher-than-expected second-quarter earnings. J.P. Morgan also raised its rating on Juniper Networks (JNPR) from neutral to overweight.
The economic calendar was quiet. Chain store sales dipped to a 0.2% pace in the three weeks ended Nov. 18, according to U.S. Redbook. Investors were awaiting Wednesday's reading of the University of Michigan's consumer sentiment index.
In the energy markets, January West Texas Intermediate crude futures rose $1.37 to $60.10 a barrel. The Trans-Alaskan Pipeline System reportedly reduced crude volume by 25% of capacity due to bad weather.
European markets finished narrowly mixed. In London, the FTSE-100 index edged down 1.9 points, or 0.03%, to 6,202.6. Germany's DAX index rose 8.06 points, or 0.12%, to 6,460.39. In Paris, the CAC 40 index added 4.61 points, or 0.08%, to 5,459.35.
Asian markets ended slightly higher. In Japan, the Nikkei 225 index edged up 8.2 points, or 0.05%, to 15,734.14. In Hong Kong, the Hang Seng index bounced 53.67 points, or 0.28%, to 19,008.3. Korea's Kospi index was up 3.69 points, or 0.26%, to 1,405.9.
Treasury prices drifted higher as Federal Reserve Governor Kevin Warsh sounded a hawkish note on inflation. The 10-year note edged up in price to 100-12/32 for a yield of 4.57%, while the 30-year bond rose to 97-16/32 for a yield of 4.66%. The White House Council of Economic Advisors downgraded its economic growth forecasts, partly underpinning Treasuries.