Wall Street report: Tuesday close
SHARE prices closed higher in a technical bounce after several sessions of heavy losses, with investors looking to President Bush's State of the Union Address to provide a further catalyst to the upside.
The Dow Jones Industrial Average closed up 99.28 points at 8,088.84, off an intraday high of 8,114.00. A total of 32 DJIA stocks closed higher while 8 closed lower. The S&P 500 was up 11.06 at 858.54 while the Nasdaq composite was up 16.91 at 1,342.18.
'It's a technical rebound,' said Art Hogan, chief market strategist at Jefferies. 'We're bidding the market up ahead of a lot of things. We've got the two-day Fed meeting although nothing is expected to come out of that, we've got the State of the Union address but the biggest part is that we've been down for a ton of days.'
Some solid corporate earnings from a number of blue chips did underpin gains on the DJIA. Merck, the biggest blue-chip gainer, closed up $2.64 or 5.10% at $54.40 on bargain-hunting and the company's announcement that it increased its earnings guidance for 2003.
Procter & Gamble ended the day up $1.95 or 2.35% at $85 as analysts welcomed the company's strong second-quarter results and positive outlook. The maker of household products such as Pampers diapers posted second quarter net earnings of $1.06 per share, up from 93 cents a year earlier as a strong performance in its health and beauty care divisions offset a mixed result in snacks and beverages.
Oil stocks put in a strong performance. ExxonMobil, closed up 84 cents or 2.64% at $32.66, wiping out most of Monday's 87 cent fall.
ChevronTexaco finished up $1.10 or 1.78% at $62.95. In the banking sector, American Express was up $1.60 or 4.79% at $35.02 amid a continued positive response to the company's better-than-expected fourth-quarter earnings which were linked to increased consumer credit cards use in the current sluggish economy and an improved travel market.
In the telecom sector, AT&T Wireless shed early gains to end the day down 30 cents or 4.48% at $6.40 on concerns about a new no-deposit product launch, which some investors feared might suffer the same default rate problem as a product offered by Sprint PCS.
SBC Communications fell 53 cents or 2.13% to $24.32 after the company said it expects another year of declining revenue as customers continue to cancel access lines and switch to competitors.
RJ Reynolds, the second biggest tobacco maker in the US, tumbled $2.12 or 4.93% to $40.90 after it posted a net loss of $59m, or 69 cents per share, against a profit of $89m, or 93 cents a share, a year earlier as it spent more in a bid to wrestle market share from low-cost suppliers.
Xerox jumped $1.40 or 17.39% to $9.45 after the company swung into profit in the fourth quarter with EPS of 1 cent compared with a loss of 19 cents a year earlier and well ahead of the consensus estimate of a loss of 11 cents per share.
In the defence sector, Northrop Grumman was up $3.47 or 3.93% at $91.86 after the number-two US defence company said reported net earnings were $1.72 per share, up from $1.28 a year earlier, helped by higher sales in its shipbuilding unit as a result of the inclusion of full-quarter results for Newport News, which the company bought in November 2001.
UPS closed up 56 cents at $61.03 after it unveiled fourth-quarter EPS before exceptionals rose to 59 cents from 57 cents a year earlier, beating the consensus forecast for an unchanged result, thanks to a record international performance.
The strong fourth quarter helped offset a warning from the parcel carrier that EPS in the first quarter may not reach the consensus estimate of 53 cents and could fall below the 50 cents achieved a year ago.
