U.S. stocks rally in final half-hour of trading
Wednesday October 6, 3:40 pm ET
By Mark Cotton
NEW YORK (CBS.MW) -- U.S. stocks gained ground in the final half-hour of trading Wednesday as investor appetite for attractively valued shares helped the market overcome a spate of profit warnings and a new high for oil after weaker-than-expected supply data.
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The Dow Jones Industrial Average (^DJI - News) was sitting close to its high for the session, up 43 points, at 10,220, breaking out of a narrow 37-point trading range it has been mired in for most of the session.
Among the gainers on the Dow, Alcoa (NYSE:AA - News) gained 1.7 percent on a favorable Commerce Department ruling over aluminum dumping on the U.S. market.
Boeing (NYSE:BA - News) gained 0.8 percent after the U.S. government filed a complaint to the World Trade Organization over European Union subsidies to rival aircraft maker Airbus.
Merck was a notable decliner on the benchmark index, slumping 4.7 percent, after a media report quoted a Food and Drug Administration study showing its recently withdrawn Vioxx drug may have behind several thousand heart attacks.
The Nasdaq Composite Index (NasdaqSC:^IXIC - News) rose 10 points to 1,965, setting itself up for a seven session of gains in a row.
The S&P 500 index (CBOE:^SPX - News) was up 5.11 points, at 1,139, while the Russell 2000 index (CBOE:^RUT - News) of small-cap stocks gained 0.6 percent.
"The market is holding up remarkably well," said Mark Bryant, senior vice-president at Brean Murray. "There is a lot of fresh money which has come in with the beginning of the fourth quarter. People have had funds sitting on the sideline and they need to put those funds to use."
"Historically the market does better between October and April."
Crude tops $52 a barrel
Crude-oil futures climbed to new heights to $52 a barrel after two key reports said U.S. supplies rose less than expected and distillate inventories fell.
Crude for November delivery was last up 81 cents at $51.90 on the New York Mercantile Exchange, after briefly spiking at $52.02 intraday.
On the foreign exchange markets, the dollar posted modest gains against its major counterparts.
Gold futures ended modestly higher, driven by uncertainty surrounding the next moves for oil and the dollar, and before Friday's key employment data.
Treasury prices fell for a second straight session amid concerns Friday's job data may show a pick-up in the economy in September.
The benchmark 10-year note was down 09/32 at 100 13/32. Its yield, which moves in the opposite direction of price, was at 4.21 percent from 4.18 percent at Tuesday's finish.
Turning back to the broader market for equities, advancers outpaced decliners by an 18 to 13 score on the New York Stock Exchange, while gainers had a 15 to 14 edge over decliners on the Nasdaq.
Volume was 1.02 billion on the Big Board, and 1.46 billion on the Nasdaq.
Stocks in focus
Dow component Alcoa (NYSE:AA - News) gained in afternoon trading after the U.S. Commerce Department ruled that South Africa's Hulett Aluminum dumped certain types of aluminum in the U.S. at below-market prices.
Elsewhere on the benchmark index, Boeing advanced after the United States filed a World Trade Organization complaint Wednesday, seeking to end European subsidies to Airbus, Boeing's top rival in making airplanes.
The European Union fired back, claiming Boeing also received billions of dollars in indirect subsidies.
Earlier, Wall Street digested a slew of profit warnings in morning trading.
Nasdaq market maker Knight (NasdaqNM:NITE - News) warned of a loss in the September quarter, where analysts were expecting a profit, weighed on financials.
Knight cited "persistent lackluster market conditions" for operating losses in its equity markets and asset management businesses. Knight shares were last down 1.2 percent. Read market focus
Investors also have another earnings warning to digest from auto parts maker Delphi Corp (NYSE:DPH - News) .
The company, which was spun off from General Motors in 1999, said it expects to report a net loss between $113 million to $120 million, wider than its previous loss targets of $10 million to $40 million. The stock plummeted 5.3 percent.
Credence Systems (NasdaqNM:CMOS - News) meanwhile said it now expects to report a fourth quarter loss of between 17 cents a share and 21 cents a share, compared with a prior forecast of a profit of 5 cents a share and 10 cents a share. The chip equipment maker's stock tumbled 5.7 percent in afternoon trading.
Shares of Chiron Corp (NasdaqNM:CHIR - News) fell 2.1 percent , extending a 16 percent decline in the prior session sparked by news it would not be able to release any of its Fluvirin flu vaccine this year.
Analysts rushed to cut their earnings estimates on Chiron, although UBS analyst David Molowa upgraded the company to "neutral," due to a more attractive valuation after the sell-off in its shares.
Overnight, Henry Schein Inc. (NasdaqNM:HSIC - News) , the primary distributor of Chiron's Fluvirin flu vaccine, cut its 2004 earnings forecast late Tuesday. The stock erased opening losses to trade up 2.9 percent in afternoon trading.
Elsewhere in the pharmaceutical sector, Merck (NYSE:MRK - News) was under pressure on concern it may face lawsuits over its Vioxx arthritis drug, which it pulled off the market last Thursday on evidence its use could lead to heart problems.
A report in the Wall Street Journal said that the Food and Drug Administration concluded in a study released to a U.S. Senator that more than 27,000 heart attacks may have been prevented if patients had used Pfizer's ( PFE : news , chart , profile ) Celebrex instead of Merck's drugs.
Shares of Pfizer briefly spiked higher in early trading, but were last off 1 percent at $30.95.
Computer Associates hits acquisition trail
In other news, Computer Associates (NYSE:CA - News) is to acquire Netegrity Inc (NasdaqNM:NETE - News) for $10.75 per share in a deal valued at $430 million.
The purchase price represents a 39 percent premium over Netegrity's $7.75 closing price on Tuesday. Shares of Computer Associates were last up 1.9 percent at $27.92 while Netegrity shares soared more than 35 percent in afternoon trading.
