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NEW YORK - Stocks advanced Friday as strong earnings from Microsoft Corp. and an optimistic outlook from Countrywide Financial Corp. tempered persisting concerns about the economy.
Housing market news this week has been glum; oil prices have surged to a record high. And though corporate earnings have so far been mixed, investors have been heartened by good news for individual stocks. Friday's report from Countrywide that despite a big loss in the third quarter, it can soon return to profitability, gave investors hope that the problems in the housing market are contained and that U.S. consumers still have spending power. Thursday night's strong report from Microsoft contributed to that view. The positive mood was not dented by news that University of Michigan's final consumer sentiment reading for this month was 80.9, down from 83.4 in September. In afternoon trading, the Dow Jones industrial average rose 58.12, or 0.43 percent, to 13,730.04. Broader stock indicators also gained. The Standard & Poor's 500 index rose 10.52, or 0.69 percent, to 1,524.92, and the technology-dominated Nasdaq composite index soared 36.34, or 1.32 percent, to 2,787.20. High oil prices didn't dampen investors spirits either. After spiking above $92 a barrel in Asian trading overnight, December crude futures were up 66 cents at $91.12 at midday on the New York Mercantile Exchange. "Because oil prices are so high, our nation's oil bill has gone up. We're exporting dollars to pay for oil and our counterparties are reinvesting those dollars back in our markets — the so-called petrodollars finding their way back," said Tom McManus, investment strategist with Banc of America Securities. Even as stocks advanced, investors poured money into commodities markets as a hedge against a falling dollar, which hit another record low against the euro. Gold futures rose $13.20 to $784.20, the highest price since January 1980. Energy, metals and agriculture futures all moved higher. Treasury bonds rose. The yield on the 10-year Treasury note, which moves inversely to the price, fell to 4.37 percent from 4.38 percent late Thursday. Friday's stock gains were fueled by company-specific news, according to Robert Pavlik, portfolio manager at Oaktree Asset Management. "Trading today is sort of choppy, but stocks are moving up based on strong earnings from Microsoft," he said. "You're also getting a pop from Countrywide's strong guidance going forward. All this is bring some attention back to the stock market. Countrywide posted a wide loss of more than $1 billion in the third quarter, but the beleaguered mortgage lender, whose stock has plummeted due to rising subprime mortgage defaults, said it will be profitable in the fourth quarter and next year. The shares jumped $2.18, or 16.7 percent, to $15.25. Microsoft's reported that its profit jumped 23 percent, thanks to brisk sales of the new Halo 3 video game, Windows and Office. Microsoft shares rose $3.08, or 9.63 percent, to $35.07. The financial sector continues to show signs of uneasiness following the summer's credit market problems. The New York Times reported that after Merrill Lynch & Co. posted its sharp third-quarter loss Wednesday, the investment bank's chairman and chief executive floated the idea of a merger with Wachovia Corp. Merrill shares rose $2.90, or 4.76 percent, to $63.80 in afternoon trading. Advancing issues outnumbered decliners by 2 to 1 on the New York Stock Exchange, with 704.3 million shares traded. The Russell 2000 Index of smaller companies rose 7.54, or 0.94 percent, to 813.66. Stock markets overseas advanced. In Asian trading, Japan's Nikkei stock average rose 1.36 percent, and Hong Kong's Hang Seng index rose 1.84 percent. In Europe, Britain's FTSE 100 rose 1.29 percent, Germany's DAX index rose 0.21 percent, and France's CAC-40 rose 0.60 percent. ___ On the Net: New York Stock Exchange: http://www.nyse.com Nasdaq Stock Market: http://www.nasdaq.com |