April 17, 2024

Stocks & Bonds: Stocks on Wall Street Post Gains

The government said the economy grew at a 3.1 percent annual rate in the fourth quarter of 2010, slightly better than economists had expected and higher than the estimate made last month.

Technology shares rose after the business software giant Oracle reported a 78 percent increase in income late Thursday. The company, which makes database software, credited new software license sales and the benefit of three full months of revenue from Sun Microsystems, a company it acquired last year. The Dow rose 50.03 points, or 0.41 percent, to close at 12,220.59. It gained 362 points for the week, the most since a 512-point jump during the week ending July 9.

The Standard Poor’s 500-stock index rose 4.14 points, or 0.32 percent, to 1,313.80. The Nasdaq rose 6.64 points, or 0.24 percent, to 2,743.06.

All three stock indexes gained more than 2 percent for the week, helping them erase losses after the March 11 earthquake that hit Japan. The week started with a 178.01 point jump for the Dow after ATT agreed to buy T-Mobile USA for $39 billion, raising hopes for more buyouts. Better economic reports and stronger earnings followed, driving more gains.

Investors were able to set aside a long list of worries including high oil prices, problems with Japan’s nuclear reactors and fresh developments in Europe’s debt crisis. Portugal looked likely to need bailout funds from the European Union after lawmakers rejected a plan to cut the country’s debts and the government fell. Standard Poor’s lowered its credit rating on Portugal late Thursday.

Portugal’s debt troubles aren’t rattling stock investors in the United States because there’s an assumption that the European Union will come to the country’s aid, said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. “There’s really this notion that governments stand ready in Europe or elsewhere to come to the rescue,” he said.

There’s also little incentive to shift money into the safest of investments, like bonds, Mr. Ablin said. The benchmark 10-year Treasury currently pays 3.4 percent a year. Even with a recent bout of turbulence, the Dow has gained 5.6 percent this year. “In the short term, taking risk pays.”

The VIX, a measure of volatility for American stocks, fell 27 percent over the week. That’s the biggest one-week drop since August 2007.

Accenture shares rose 4.5 percent, to $54.29. The consulting firm’s quarterly earnings rose 22 percent on stronger revenue. Both its income and revenue beat analysts’ expectations.

Research In Motion, the maker of the BlackBerry mobile device, fell 11 percent. Its profit jumped, but the company forecast earnings in the current quarter that were well below what analysts had expected.

The dollar rose and Treasury prices fell after Charles I. Plosser, president of the Federal Reserve’s Philadelphia branch, said the stronger United States economy required the central bank to begin planning ways to sell Treasury bonds and raise short-term interest rates in the “not-too-distant future.”

The Treasury’s benchmark 10-year note fell 10/32, to 101 17/32, and the yield rose to 3.44 percent, from 3.40 percent late Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=cb49161ec377a4affa5a46e814cc4642

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