Stocks rang up a solid advance Thursday, as investors, more confident about the economy or, perhaps, simply tired of playing it safe, displayed a newfound readiness to buy. For many, the high-tech sector held the most interest.
Of course, on the next-to-last trading day of the third quarter, some of Thursday’s surge no doubt reflected end-of-the-quarter buying by funds moving to reposition their portfolios, a maneuver traders refer to as “window dressing.”
All the major indices opened down and moved into positive territory only after a mini buying binge in the afternoon.
The Dow Jones industrial average rose 79.69, to close at 10552.78. It was the fourth consecutive increase for the blue chips, although prior to Thursday the upturns had been only modest in scale.
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Reflecting the tech sector’s strong performance, two of the Dow’s biggest gainers were chipmaker Intel and software colossus Microsoft.
The broader Standard & Poor’s 500 index rose 10.79, to 1227.68.
The tech-heavy and historically more volatile Nasdaq composite index rose 25.82, a hefty 1.22 percent, to close at 2141.22.
Big movers included software provider Red Hat, which soared 30 percent, to $21.44, after the company reported strong quarterly results. Shares of online auctioneer eBay rose 6.1 percent, to $41.30, while Dell Computer and Oracle showed smaller gains. However, Blackberry manufacturer Research in Motion tumbled 9.4 percent, closing at $70 a share, after the company’s subscriber growth fell short of expectations.
The Russell 2000 index of smaller companies rose 8.99, or 1.37 percent, to close at 665.03.
Although equity markets have been hypersensitive to oil price movements in recent weeks, Thursday’s market upturn came on a day when crude for November delivery rose 44 cents, to $66.79 a barrel.
Treasury securities, which typically move in the opposite direction from stocks, fell 10/32s, to yield 4.30 percent.
Not over til it’s over? Deutsche Bank initiated coverage of 14 home builders with a buy rating Thursday, citing what it called “a benign outlook for the U.S. economy.” Builder stocks Pulte Homes, Toll Brothers and Ryland Group enjoyed a major run-up during the home-building boom of recent years but have softened recently because the sector is expected to face pressure as once superlow interest rates move higher.
But Deutsche analyst Gregg Schoenleber contends the current strong level of housing starts and prices isn’t fueled just by cheap money but rather reflects “fundamental factors” like positive demographic trends and land-supply issues. “Macroeconomic factors continue to support the housing market,” he said.
Read all about it: Goldman Sachs media analyst Peter Appert, saying newspaper industry revenue growth in the third quarter “will likely be the weakest in two years,” noted in a lengthy report that he trimmed his third-quarter earnings forecasts for publishing chains Gannett, Knight Ridder, McClatchy, New York Times and Tribune to reflect their “disappointing” revenue trends and profit-margin pressures.
Big movers: JPMorgan Chase shares increased 1.27 percent, to $34.35, after the banking giant agreed to sell its online brokerage operation to ETrade. ETrade shares showed a better jump, 5.5 percent, to $17.22.
Local stocks: Navigant Consulting shares climbed $1.36, or 7.6 percent, to $19.26, after the company reported stronger-than-expected quarterly earnings.
– Morningstar rose 2 percent, to $31.59, after the Chicago financial-research concern disclosed an agreement to supply Morgan Stanley brokerage clients with independent stock research under terms of the so-called global analyst research settlement.
As part of a deal that resolved Wall Street’s analyst conflict-of-interest scandal, major brokerage houses agreed to buy hundreds of millions of dollars worth of third-party research. Morningstar has been a major beneficiary, as Morgan Stanley is the sixth brokerage to sign up for its research.