- The Washington Times - Wednesday, March 15, 2006

BLOOMBERG NEWS

U.S. stocks climbed for a fourth day after earnings from Sears Holdings exceeded estimates and a Federal Reserve survey showed steady economic growth.

Shares of Sears, the nation’s largest department store chain, had their biggest gain in more than a year. Railroad stocks also rose after Union Pacific Corp. boosted its profit forecast.

The release of the Fed’s beige book report, along with a drop in oil prices, helped investors shake off concerns over rising bond yields. The afternoon rally pushed benchmark stock indexes to four-year highs for a second day.

“We’ve seen very satisfactory earnings growth,” said Charles Crane, a strategist at Scotsman Capital Management in New York. “There’s a hope that the Fed is close to the end of its tightening campaign.”

The Standard & Poor’s 500 Index climbed 5.54, or 0.4 percent, to 1303.02. The Dow Jones Industrial Average rose 58.43, or 0.5 percent, to 11,209.77. Both are at levels not seen since May 2001. The Nasdaq Composite Index increased 15.94, or 0.7 percent, to 2311.84.

Almost five stocks rose for every two that fell on the New York Stock Exchange. About 1.63 billion shares changed hands on the Big Board, just below the three-month average.

Sears rallied $15.02, or 13 percent, to $132.29 for the top performance in the S&P; 500 and biggest gain since March 2005. The largest U.S. department store company said fourth-quarter profit was $4.03 a share on lower costs and a revival in sales at Kmart. Credit Suisse analyst Gary Balter, top-ranked by StarMine, estimated earnings of $3.53, and the average estimate of five analysts surveyed by Thomson Financial was $3.62.

Union Pacific gained $5.04 to a record $90.25. The company raised its per-share earnings forecast for the first quarter by more than 20 percent, citing increased shipping volume and better operating margins.

The outlook helped send a measure of S&P; 500 railroad stocks, among this year’s best performers, up 5.7 percent. The index is up 16 percent this year as railroads benefit from shipping commodities such as coal. Burlington Northern Santa Fe Corp. rose $4.80 to $81.30. CSX Corp. added $3.01 to $59.56.

Ten-year Treasury note yields rose three basis points, or .03 percentage point, to 4.73 percent, after an unexpected acceleration in a gauge of New York manufacturing.

The Fed Bank of New York’s general economic index increased to 31.2, the highest since July 2004. Economists expected a reading of 18.9. A number greater than zero signals a higher percentage of manufacturers reported an improvement in business than deterioration.

An increase in bond yields to 4.80 percent last week pushed the stock market lower on concern about higher borrowing costs and competition with equities from bonds.

Indexes rebounded after the release of the regional survey by 12 Fed district banks.

“Most districts characterized the pace of expansion as moderate or steady,” the central bank said in the report. Consumer and business spending continued to grow and pressure to increase wages was “little changed,” the report added.

Crude oil for April delivery fell 1.5 percent to $62.17 a barrel in New York. The Energy Department reported that U.S. inventories increased for a fifth straight week.

DuPont Co., the third-largest U.S. chemical maker, rose 95 cents to $42.87. DuPont boosted its profit forecast, said it will cut 1,500 jobs and close plants in Europe that make paints for cars.

First-quarter earnings will be 80 cents a share, excluding some costs, the company said, up from an earlier estimate of 70 cents.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide