NEW YORK (AP) — Stocks shook off early losses and closed higher yesterday after Federal Reserve Chairman Alan Greenspan delivered an upbeat assessment of the economy and Wall Street focused on solid earnings reported by a growing number of companies.
The Nasdaq Composite Index and the Standard & Poor’s 500 index reached four-year highs.
The market opened lower as investors punished Intel Corp. and Yahoo Inc. after their earnings reports, issued after the close of regular trading Tuesday, fell below analysts’ expectations. Stocks briefly slid further after Mr. Greenspan told Congress that the economy should achieve sustained growth with low inflation in coming months, a sure sign incremental interest rate increases would continue.
But the sell-off did not last, because additional rate increases long have been expected.
Investors also reconsidered the flow of earnings, which have been positive aside from a few high-profile disappointments.
The Dow Jones Industrial Average rose 42.59, or 0.40 percent, to 10,689.15.
Broader stock indicators also ended higher. The Standard & Poor’s 500 index rose 5.85, or 0.48 percent, to 1,235.20, its best close since July 2, 2001, and the Nasdaq Composite Index rose 15.39, or 0.71 percent, to 2,188.57, moving into positive territory for the year and reaching its highest point since June 18, 2001.
Bonds were higher, with the yield on the 10-year Treasury note falling to 4.17 percent from 4.19 late Tuesday. The dollar fell against the euro. Gold prices were higher.
Crude oil prices dropped more than $1 a barrel at one point after the Energy Department’s weekly figures on petroleum reserves were better than expected. A barrel of light crude settled at $56.72, down 74 cents on the New York Mercantile Exchange.
In stocks, investors pummeled the day’s losers. Intel fell $1.27 to $27.44 after it reported strong earnings, but a gross margin below analysts’ forecasts. Investors also ignored Yahoo’s stellar earnings, instead focusing on how the results missed analysts’ expectations. The stock fell $4.33 to $33.40.
Eastman Kodak Co. fell 64 cents to $28.10 after it posted its second straight quarterly loss. The struggling photography company also announced as many as 10,000 additional job cuts on top of 12,000 to 15,000 layoffs already planned.
Investors sold off General Motors Corp. after the automaker missed earnings forecasts. Its stock fell 25 cents to $36.58. The company reported a $286 million loss in the second quarter, dragged down by a $1 billion loss at its North American automotive operations.