Friday, July 15, 2005

NEW YORK (AP) — Wall Street ended a bullish week with a modest advance yesterday as strong economic data encouraged investors and sent the Standard & Poor’s 500 index to a four-year high for the second straight session.

Government economic reports were unabashedly positive, just as they were in the previous session. The Labor Department’s Producer Price Index, which measures inflation in wholesale prices, was flat in June, while “core” PPI — with food and fuel costs removed — fell 0.1 percent.

In addition, the Federal Reserve reported industrial production rose 0.9 percent in June, the biggest increase in 14 months. And business inventories rose by a meager 0.1 percent in May, according to the Commerce Department, meaning that sales are brisk and businesses aren’t stuck with large inventories.

But some analysts questioned the week’s increase as overdone — the Dow Jones industrials gained 1.83 percent, for example — and predicted that a selloff was imminent.

“If you look around, is this economic data really worth the jump we had?” asked Bill Groenveld, head trader at VFinance Investments. “I don’t think so, and that means we’ll probably have to have a pullback at some point. We still have oil out there, and we still have the Fed.”

After spending most of the session in negative territory, the Dow Jones Industrial Average rose 11.94, or 0.11 percent, to 10,640.83. It was the Dow’s best close since March 16.

Broader stock indicators closed modestly higher after trading lower much of the day. The S&P 500 rose 1.42, or 0.12 percent, to 1,227.92, and the Nasdaq Composite Index gained 3.96, or 0.18 percent, to 2,156.78, beating the previous session’s 2005 high.

The S&P and Nasdaq have been up for seven straight sessions, while the Dow has climbed six of the past seven trading days. With little economic news expected in the coming week, analysts warned that the stock market will require other bullish catalysts for the rally to continue.

While few investors could argue with General Electric’s 24 percent rise in quarterly profits, its earnings of 44 cents per share — in line with Wall Street’s forecasts — failed to generate any excitement. The conglomerate, seen as a barometer of the overall market, also lowered its third-quarter earnings projections. GE slipped 10 cents to $35.53.

Fellow Dow component Hewlett-Packard Co. added 32 cents to $24.94 after the Wall Street Journal and CNET’s reported the computer maker will undergo a major restructuring. As many as 15,000 jobs could be cut.

McDonald’s Corp. reported strong gains in monthly sales, crediting its new fruit salad for bringing in more customers. The fast-food chain also reported strong international sales and boosted its quarterly earnings forecasts. McDonald’s gained $1.39 to $30.99.

Vaccine maker Chiron Corp. lost $1.24 to $36.03 after slashing its expected flu vaccine shipments; the company discovered tainted vaccines in a German production plant.

Declining issues barely outnumbered advancers New York Stock Exchange, where volume came to 1.32 billion shares, compared with 1.57 billion traded on Thursday.

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