NEW YORK (AP) — Wall Street pushed higher yesterday as strong earnings from companies such as Morgan Stanley helped offset investors’ lingering concerns about a weak dollar.
Defense stocks, however, sagged on a downgrade from Smith Barney.
Trading was choppy as many investors pondered their next moves in advance of the third-quarter earnings season.
Analysts said many were opting to hold off on major bets after six months of market gains.
“The dollar seems to be topping everyone’s list of worries, but in the big picture, it looks like a normal course of backing and filling,” said Bryan Piskorowski, market commentator at Wachovia Securities.
“The market has been on a tear, and it needs to digest.”
The Dow Jones Industrial Average closed up 40.63, or 0.4 percent, to 9,576.04, having lost 109 points in the previous session.
The broader market also finished higher.
The Nasdaq Composite Index gained 27.11, or 1.5 percent, to 1,901.73.
The Standard & Poor’s 500 index rose 6.22, or 0.6 percent, to 1,029.04.
Stocks have been on an upward trend since mid-March as investors grow confident of an improving economy.
Some analysts believe the market is due for some pullbacks after advancing so quickly, particularly as the third-quarter season approaches.
In addition, investors are concerned that a weak dollar can dampen foreign investment.
Finance ministers from leading industrial countries appear to signaling support for a weaker U.S. currency.
“It looks like we’re having a technical reaction after [Mondays] decline and a market that still wants to move higher,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
“We’ve also already started the earnings preannouncement season, and so far the warnings have been scant,” he said.
“That bodes well for the earnings season itself. But as we get into October, we’ll probably have a market that will look to sell off on the news of good earnings.”
Lehman Brothers Holdings Inc. advanced 69 cents to $70.90 as the brokerage reported third-quarter profits that handily beat Wall Street’s estimates.
Morgan Stanley rose $1.18 to $52.33 as the brokerage posted a doubling in quarterly profits, citing strong performance in investment banking and capital markets.
Decliners included Verizon Communications Inc., which dropped $1.58 to $33.13, after the telecommunications company lowered its 2003 earnings outlook, citing weak business spending and falling demand.
Defense stocks also took a hit after Smith Barney lowered the ratings of several companies, citing limited growth prospects.
Lockheed Martin Corp. fell $1.85 to $45.97, while Northrop Grumman Corp. decreased $3.53 to $87.96.
Advancing issues outnumbered decliners 9-to-5 on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, a barometer of smaller-company stocks, rose 5.71, or 1.1 percent, to 519.36.
In Europe, France’s CAC-40 declined 0.5 percent, Britain’s FTSE 100 fell 0.2 percent and Germany’s DAX index lost 1.3 percent.
Japan’s financial markets were closed yesterday for Autumnal Equinox Day, a national holiday.
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