- The Washington Times - Tuesday, April 10, 2007

NEW YORK (AP) — Stocks edged higher yesterday as investors refrained from major moves ahead of first-quarter earnings reports that began with Alcoa Inc.’s results after the closing bell. A modest increase in the Dow Jones Industrial Average marked the eighth-straight win for the blue-chip index, its longest such streak since 2003.

Aluminum producer Alcoa reported a better-than-expected profit for the first quarter, pleasing investors who bid the company’s stock up in after-hours trading. Wall Street was looking for results from the Dow component to not only gauge the pace of earnings for the quarter but as a proxy for the health of the overall economy.

Yesterday was the second day in a row that stocks showed little overall movement as investors awaited news of how companies fared during the first quarter, and also their expectations for the coming quarters. In the fourth quarter, Standard & Poor’s 500 companies snapped an 18-quarter streak of double-digit profit gains, and Wall Street expects profit growth to remain in the single digits for the first three months of the year.

“A lot of people are going to be watching earnings very closely and not just the numbers, but the guidance that they give going forward,” said J. Michael Barron of Knott Capital.

The Dow rose 4.71, or 0.04 percent, to 12,573.85. The S&P; 500 Index rose 3.78, or 0.26 percent, to 1,448.39, and the Nasdaq Composite Index gained 8.43, or 0.34 percent, to 2,477.61. The Russell 2000 Index rose 2.87, or 0.35 percent, to 814.51.

Bonds continued their recovery, with the yield on the benchmark 10-year Treasury note falling to 4.72 percent from 4.75 percent late Monday.

Oil prices rose after selling off Monday following doubts about Iran’s comments about its uranium enrichment achievements. A barrel of light, sweet crude for delivery on the New York Mercantile Exchange rose 38 cents to settle at $61.89.

“I think we’re all anticipating the earnings season. I think everyone is going to wait on their heels and see how the numbers are going to come through,” said Tim Hartzell of Kanaly Trust Co.

He contends investors are perhaps too dour in their assessment of corporate earnings, though he is waiting to get a sense of how the numbers stack up before making any big moves. He noted companies’ cash flows remain strong. He also expects companies will continue to repurchase stock, which could help boost per-share profit figures.

As they awaited earnings news, investors examined comments from Fed governors, but appeared unmoved.

Fed Gov. Frederic Mishkin said yesterday that inflation expectations remain “well anchored” and said inflationary pressures have been “falling back again.”

Dallas Fed President Richard Fisher said the U.S. economy has been growing but that its expansion is slowing. He also said inflation remains stubbornly high.

Investors were also awaiting minutes expected today from the Fed’s most recent meeting at which it left short-term interest rates unchanged for the sixth straight time.

Alcoa, which rose 3 cents to $34.90 in regular trading, picked up another 60 cents in extended dealings after releasing earnings.

Dow Chemical fell $1.12, or 2.4 percent, to $45.51 after the chemical and plastics maker said it has had no discussions about a leveraged buyout. A British newspaper reported over the weekend that a group of Middle Eastern investors and U.S. buyout firms was preparing a $50 billion bid.

Citigroup rose 82 cents to $52.40 ahead of a major restructuring announcement in which some 26,000 workers will be reassigned or see their jobs eliminated, according to a report by the New York Times. Chief Executive Charles Prince is to announce the plan today.

D.R. Horton Inc., the nation’s largest home builder by deliveries, said its second-quarter sales order fell 37 percent, led by even steeper declines in California and the Southwest. Shares fell 34 cents to $21.70.

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