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Caterpillar Lifts Blue Chips to Best Month of 2011

[Blue chips up, oil up, dollar down. What else is new?]

http://online.wsj.com/article/SB10001424052748703655404576292684001736592.html?mod=yahoo_hs

›APRIL 29, 2011, 5:40 P.M. ET
By KRISTINA PETERSON

NEW YORK—Blue chips closed out their best month of the year on Friday, as first-quarter earnings reports sent indexes to fresh multiyear highs.

The Dow Jones Industrial Average added 47.23 points, or 0.4%, to 12810.54, the highest close since May 2008. The measure surged 4% in April to extend the win streak to a fifth straight month. The Dow is up almost 11% for the year.

Powering the move was Caterpillar's climb of $2.77, or 2.5%, to 115.41, after the maker of construction and mining equipment's earnings and revenue blew past expectations. Merck rose 18 cents, or 0.5%, to 35.95, after the pharmaceutical company's results topped forecasts. Chevron rose 63 cents, or 0.6%, to 109.44, after the oil company's earnings jumped, boosted by higher oil prices and stronger refining margins.

Microsoft sank 79 cents, or 3%, to 25.92 after reporting a decline in sales of its Windows computer operating system.

The Nasdaq Composite Index edged up 1.01 point to 2873.54, the highest close since December 2000. The Standard & Poor's 500-stock index rose 3.13, or 0.2%, to 1363.61.

Investors said the market's monthly rise was sparked by the steady flow of better-than-expected first-quarter earnings reports, which have largely drowned out lingering concerns about the labor market and rising oil prices.

"This rally is being driven by corporate earnings," said Joe Quinlan, chief market strategist at U.S. Trust, Bank of America Private Wealth Management. "That's exactly what we need, because the corporations have the cash and the consumers need to continue to deleverage and get their houses in order."

U.S. economic data were lukewarm on Friday, as Americans' incomes rose 0.5% in March but their spending slowed from a month earlier. When adjusted for inflation, consumer spending rose 0.2% last month.

Separately, a Thomson Reuters/University of Michigan index of consumer sentiment at the end of April came in a hair below the expected 70 reading and the Chicago Purchasing Managers' index for April came in just beneath forecasts.

"There is a recovery in place, but it's going to be sluggish," said Michael Yoshikami, chief investment strategist at YCMNET Advisors. "I do expect you're going to start to see a slowdown, particularly as QE2 goes away in June," he said, referring to the cental bank's bond-buying program. Still, he said the market was finding fresh momentum from the rush of encouraging first-quarter earnings reports.

Research in Motion tumbled 7.94, or 14%, to 48.65 after warning of slack BlackBerry sales.

SunPower jumped 5.57, or 35%, to 21.69, after announcing that French energy giant Total plans to acquire a 60% stake in the U.S. solar-panel maker in a deal that values the company's equity at $2.3 billion and will provide access to credit over the next five years. U.S.-listed shares of Total rose 43 cents, or 0.7%, to 64.23.

Crocs slid 1.18, or 5.5%, to 20.11, after the shoe maker's first-quarter profit more than tripled, but its second-quarter forecast came in slightly below the Street estimate.

Expedia added 34 cents, or 1.4%, to 25.02, after the online travel agent's first-quarter earnings fell 12% on cost increases as the online travel agent's adjusted profit inched lower than expected, but revenue topped analysts' expectations.

Crude-oil prices rose $1.07, or nearly 1%, to $113.93 a barrel, the highest settlement price since September 2008. Gold climbed $25.20, or 1.7% to a record settlement of $1556 a troy ounce.

Demand for U.S. Treasurys rose. The 10-year note rose 5/32, or $1.5625 for each $1,000 invested, pushing the yield down to 3.298%, as prices and yields move inversely.

The U.S. dollar touched the weakest point since July 2008, before rebounding. The euro moved to $1.4810 from $1.4821 late Thursday in New York.‹