- The Washington Times - Friday, July 17, 2009

NEW YORK | Tech shares pulled the market higher again Thursday, a day after stocks surged on a strong forecast from chip maker Intel Corp.

The tech-heavy Nasdaq advanced for the seventh straight day and closed at its highest level since October ahead of profit reports from Internet search company Google Inc. and computer maker IBM.

An apparent turn in sentiment from economist and New York University professor Nouriel Roubini helped lift the market. Mr. Roubini’s statement that the worst of the economy’s troubles are past was notable because he has been deeply pessimistic about prospects for the economy. He was one of the few experts to predict the global financial crisis.

Some analysts attributed the buying to short covering, where investors have to buy stock after having earlier sold borrowed shares in a bet that the market would fall.

Stocks continued the week’s sprint-and-jog play, carving more modest gains after surging the day before. The market surged Monday followed by a flatter day Tuesday.

Dan Deming, a trader with Strutland Equities in Chicago, said tech stocks rose because investors were afraid they would miss out on Google and IBM, which both reported better-than-expected results after the closing bell.

“It’s kind of feeding on itself because you’re seeing these earnings come in from the tech sector, particularly, showing pretty good numbers,” he said.

Ahead of their reports, Google rose $4.43, or 1 percent, to $442.60, while IBM rose $3.42, or 3.2 percent, to $110.64.

The jump in stocks this week halted a monthlong slide that came as investors worried that a huge rally in March and April on hopes for an economic recovery had gone too far. This week’s earnings reports have given investors some of confirmation that the economy isn’t as bad as feared, but they still want to see more evidence of a turnaround.

The Dow rose 95.61, or 1.1 percent, to 8,711.82. The Standard & Poor’s 500 index rose 8.06, or 0.9 percent, to 940.74. The Nasdaq composite index rose 22.13, or 1.2 percent, to 1,885.03, its best finish since Oct. 3.

In economic news, the Labor Department said new claims for unemployment insurance plunged last week by 47,000 to 522,000, the lowest level since early January. Economists polled by Thomson Reuters predicted an increase to 575,000. The improved data, however, might have been affected by the timing of automobile plant shutdowns.

The dollar fell against other currencies. Gold prices fell.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide