Stocks end higher in choppy trading

NEW YORK (AP) — Wall Street edged higher in choppy trading yesterday, with investors making few moves as they waited for companies to start reporting fourth-quarter earnings this week.

With only a handful of firms issuing profit warnings and some others forecasting year-over-year earnings growth as high as 20 percent, analysts expressed confidence that the market would keep advancing.

“There’s reason to be more optimistic than most people were after seeing that crummy jobs figure on Friday,” said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis. “Whenever business begins to come back, that’s not a recovery you measure in months, you measure it in years.”

The Dow Jones Industrial Average closed up 26.29, or 0.2 percent, at 10,485.18, after gaining 0.5 percent in the past week.

The broader gauges also were higher. The Nasdaq Composite Index closed up 24.86, or 1.2 percent, at 2,111.78, after rising 4 percent in the past week. This was a new 2-year closing high for the Nasdaq, which last closed higher on July 3, 2001, when it stood at 2,140.80.

The Standard & Poor’s 500 index gained 5.37, or 0.5 percent, to 1,127.23, after a weekly gain of 1.2 percent.

The market still was digesting the employment data released Friday by the Labor Department, which showed unemployment dropping to a 14-month low of 5.7 percent but payrolls increasing by just 1,000 jobs, a sign that many have given up the search for work.

For the most part, though, investors were focused on the strong earnings outlook. But analysts also warned that some of the expected profit gains already may be reflected in stock prices, as companies have anticipated for some time they would benefit from easy year-over-year comparisons. It may be more difficult for them to best returns of last year in future quarters, said Neil Massa, equity trader at John Hancock Funds.

“In the short term, there’s no danger earnings will disappoint; it doesn’t look like interest rates will be hiked for a while, so that all bodes well,” Mr. Massa said. “However, I think we’re definitely in an overbought position, and bound to sell off a little bit. But I think the trend is still upward.”

Adecco SA, the world’s largest employment company, lost $5.23 to close at $11.70 after postponing publication of its audited 2003 results because of unresolved control and compliance issues.

Countrywide Financial Corp. closed down 86 cents at $71.18 after narrowing its outlook for the year and saying that it expects quarterly earnings at the lower end of its forecast owing to demand for less interest-rate-sensitive products.

Computer Associates International Inc. lost 13 cents to close at $27.99 after announcing that regulators have alerted it to a potential enforcement action.

Merck & Co. declined $1.23 to $45.90 after brokerage firm Credit Suisse First Boston downgraded it, citing weak growth in its core domestic drug lines. Meanwhile, Bristol-Myers Squibb Co. gained 52 cents to close at $29.53 after CSFB upgraded its rating on recent product launches.

Also yesterday , Nasdaq officials announced that the index will list the shares of six firms that trade on the New York Stock Exchange, including Hewlett-Packard Co., Charles Schwab Corp. and Walgreen Co., under a new dual-listing program. Analysts said dual listing will allow investors a greater chance to find the best price for a stock.

Advancers outnumbered decliners slightly more than 5-to-4 on the NYSE. Consolidated volume was moderate, with 1.97 billion shares traded.

, compared with 2.27 billion shares on Friday.

The Russell 2000 Index, which tracks smaller-company stocks, closed up 7.81, or 1.4 percent, at 583.01.

Overseas, Japan’s financial markets were closed yesterday for a national holiday, and were scheduled to reopen today. In Europe, France’s CAC-40 declined 0.4 percent, Britain’s FTSE 100 closed down 0.4 percent and Germany’s DAX index shed 0.5 percent.