Current weather

  • Scattered clouds
  • 54°
    Scattered clouds

Wall Street rebounds on upbeat Sears outlook

Posted: Thursday, April 11, 2002

NEW YORK -- An upbeat earnings outlook from retailer Sears, Roebuck lifted Wall Street out of its malaise Wednesday, sparking a broad rally across the market on hopes that profits are improving and that higher stock prices will prove justified.

The Dow Jones industrials rose more than 170 points, the biggest gain in more than a month. But analysts were skeptical the momentum would last, noting that earnings season is just beginning and Wall Street has yet to see a preponderance of companies confirm that business is turning around.

''A rebound is a very fair label of today's action,'' said Scott Bleier, president of Hybridinvestors.com. ''But the sustainability of it all remains questionable, particularly since we are in preannouncements and earnings reports season.''

The Dow closed up 173.06, or 1.7 percent, at 10,381.73, ending a two-session losing streak. The last time the average rose more was March 4, when it gained 217 points.

Broader stock indicators also surged. The Standard & Poor's 500 index advanced 12.67, or 1.1 percent, to 1,130.47, while the Nasdaq composite index rose 24.50, or 1.4 percent, at 1,767.07.

Investors bid Sears up $2.98, or 5.8 percent, to $54.18 after the retailer indicated its first-quarter results would be better than expected because of better inventory controls and other organizational changes, although revenues remain soft.

The buying momentum quickly spread across the market, including the tech sector. Cisco and IBM rebounded despite concerns about the tech bellwethers' earnings. IBM gained $1.27 to $89.01 after sliding on a profit and revenue warning Monday. Cisco rose 73 cents to $15.55, recovering some of its loss Tuesday on speculation it would reduce its forecast.

Still, Oracle dropped 43 cents to $11.55 on investors' belief that the software maker's earnings would be lower than expected. Concern about disappointing earnings also plagued WorldCom, which fell 63 cents to $4.77.

And brokerage stocks slipped after the state of New York said it was expanding its investigation into alleged conflicts of interest involving Wall Street analysts. Merrill Lynch, which was publicly identified as a target of the probe Monday, fell $1.17 to $50.92. Goldman Sachs, which is also said to be under investigation, lost 11 cents to $84.49.

There were other reminders that the market's difficulties are not over. Xerox slid 34 cents to $9.94 after The Wall Street Journal reported the Securities and Exchange Commission had notified two former company officials they might face civil charges for accounting fraud.

Wednesday's gains contrasted sharply with the lackluster-to-negative trading that has characterized recent sessions. Stocks have been falling on mixed earnings reports and outlooks that have made it difficult to discern whether business is improving. Technology stocks have been particularly vulnerable on fears the sector will turn around at a slower pace than hoped.

Although the Dow is up 3.6 percent from where it started 2002, the Nasdaq, which more closely tracks the tech sector, is off by 9.4 percent. The S&P, another broad measure, has lost 1.5 percent.

''People are nervous about earnings and they're afraid technology is going to take it on the chin. So they're not buying,'' said Jack Francis, managing director at UBS Warburg. ''The market is also starting to question whether the tech sector is going to turn around in the second half of 2002.''

The violence in the Middle East has exacerbated the losses, as Wall Street worries that the conflict might cause higher oil prices and further impede the strength of any recovery.

Advancing issues led decliners more than 2 to 1 on the New York Stock Exchange. Consolidated volume came to 1.77 billion shares, compared with 1.52 billion Tuesday.

The Russell 2000 index rose 8.29 to 511.30.

Overseas, Japan's Nikkei stock average rose 0.9 percent. In Europe, Germany's DAX index advanced 1.8 percent, Britain's FT-SE 100 climbed1.0 percent, and France's CAC-40 gained 1.3 percent.



CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS