- The Washington Times - Tuesday, August 2, 2005

NEW YORK (AP) — Wall Street surged higher yesterday, carrying the Russell 2000 to a record close as investors welcomed encouraging economic data and a continuation of double-digit corporate earnings growth. The Standard & Poor’s 500 and Nasdaq Composite Index again reached their best closing levels in more than four years.

Investors embraced the Commerce Department’s report that consumer spending rose 0.8 percent in June, the largest increase since April. Incomes also grew at a nice clip, which dovetailed with an improved jobs picture in June when the unemployment rate fell to 5 percent, a nearly four-year low. Another Commerce Department report showed orders at U.S. factories rose 1 percent in June in line with expectations.

Strong corporate earnings again drove stock prices. Earnings are on track to grow 10.74 percent for the second quarter, which would be the 13th straight quarter of double-digit earnings growth. Since the early July start of earnings season, the market has gained 3.7 percent, reversing the 1.70 percent loss for the first half of the year, according to data from Standard & Poor’s.

As the market has recovered from its March 2003 lows, 84 percent of that gain has been attributable to higher corporate earnings, said David Darst, chief investment strategist of Morgan Stanley’s Individual Investor Group.

“We’re finally starting to see the markets wake up to the fact that the economy is in pretty good shape,” said John Caldwell, chief investment strategist for McDonald Financial Group, which is part of Cleveland based KeyCorp. “Most of the data continues to be good.”

The Russell 2000 index of smaller companies rose 5.71, or 0.84 percent, to an all-time high of 688.51. The record, Russell’s second lifetime high in a month, comes as investors warm to the somewhat riskier stocks that make up the index.

The Nasdaq Composite Index rose 22.77, or 1.04 percent, to 2,218.15, its best close since June 2001. The S&P; 500 index reached a new four-year high for the sixth time since July 14. The index rose 8.77, or 0.71 percent, to 1,244.12

The Dow Jones Industrial Average rose 60.59, or 0.57 percent, to 10,683.74.

Crude oil futures, one of Wall Street’s persistent worries this summer, closed higher. A barrel of light crude settled at $61.89, up 32 cents, on the New York Mercantile Exchange.

Bonds fell, with the yield on the 10-year Treasury note at 4.33, up from 4.32 late Monday, its highest level since April. The U.S. dollar rose against the euro. Gold prices were flat.

In company news, Unocal Corp. rose 16 cents to $64.53 after China’s state-owned oil company CNOOC Ltd. withdrew its $18.5 billion offer, opening the way for Chevron Corp. to complete its planned $17.4 billion acquisition of Unocal. CNOOC rose $4.15 to $73.49; Chevron rose $1.13 to $59.56.

Marsh & McLennan Companies Inc., the nation’s largest insurance brokerage, said lower earnings in its insurance services and investment management divisions as well as restructuring charges reduced profits 57 percent in the second quarter, but the results were better than analysts expected. The stock fell 40 cents to $28.56.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More

Click to Hide