Stocks rose today, extending Thursday's big rally and closing out the Dow Jones industrial average's first winning week in two months, as investors placed bets that the corporate earnings slump may be coming to an end.
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The Dow Jones industrial average rose 60.07 points, or 0.57 percent, to finish at 10,539.06, according to the latest data, while the Nasdaq composite index edged up
8.97 points, or 0.43 percent, to 2,084.71 after late-session selling clipped larger gains earlier in the session. The benchmark Standard and Poor's 500 index rose 7.54 points, or 0.62 percent, to 1,1215.68.
For the week, the Dow gained 2.8 percent — the first weekly gain since the week ended May 18 — the Nasdaq composite rose 4 percent and the S&P 500 grew 2.1 percent.
Friday's follow through came after the biggest stock-market rally in two months Thursday, sparked primarily by Microsoft the world's No. 1 software company and Dow component told investors to expect an improvement in quarterly sales.
"People are shrugging off" bad news, said Joseph Ranieri, managing director of trading at Adams, Harkness & Hill in Boston. "In the third and fourth quarter, we could get some signs of an upturn and people are setting themselves up now."
Check on Inflation and Consumers
A government report before the opening bell showed that sales at U.S. retail stores showed tepid gains for a second straight month in June, lifted primarily by an uptick in new cars sales due to price discounting. The report implied a cautious shopping mood among consumers, whose spending fuels two-thirds of national economic activity.
"The numbers are just a little bit troublesome," said Hugh Johnson, chief investment officer of First Albany Corp in Albany, New York. "The single biggest worry is that consumer spending will slow."
Johnson said the retail sales report will weigh on the market, though not heavily. "Clearly the market's focus is still earnings," he added.
Prices paid to U.S. producers fell in June at the sharpest rate in more than two years, the government also said before the market opened, indicating a nonthreatening inflation picture.
The Producer Price Index, a closely watched gauge of wholesale inflation, slid 0.4 percent last month after a slim 0.1 percent gain in the prior month, the Labor Department said.
"The decline in PPI is greater than had been expected," Johnson said. "The reason is the decline in energy prices was clearly steeper than we had expected. That accounts for the surprise in PPI."
The Commerce Department said June retail sales were up 0.2 percent to a seasonally adjusted $292.9 billion following a revised 0.4 percent gain in May. June sales were slightly weaker than the 0.3 percent advance forecast by Wall Street economists.
In another report, U.S. consumer confidence edged higher for a third straight month in July but the survey did little to enthuse the market. The University of Michigan's preliminary July consumer sentiment index pushed up to 93.7 from 92.6 in June, extending a gradual rebound from a floor of 90.6 in February, its lowest level in nearly five years.
Movers and Shakers
Juniper, the No. 2 maker of Internet routers, gained 13 cents to $28.60. The company posted results that were in line with sharply reduced estimates and forecast a slight sales recovery by year-end. Its rival Cisco Systems Inc. added 96 cents to $18.82.
Stocks of companies that did not hint at a later-year recovery did not fare so well.
Advanced Micro Devices Inc. dropped $1.40 to $21.30. The chip maker reported results that topped sharply lowered expectations, but cautioned it may report a third-quarter loss and a sales drop of 10 percent to 15 percent from second-quarter levels.
Internet security software maker RSA Security Inc. sank $3.98 to $25.97 after warning results for the second half of the year would fall well short of Wall Street estimates and economic difficulties could last for two to four more quarters.
Intel Corp., AMD's chief rival in the market for microprocessors, swung between gains and losses. In mid-afternoon trading, shares slipped 8 cents to $30.02. The Philadelphia Stock Exchange semiconductor index eased 0.54 percent.
Computer memory chip developer Rambus Inc. dropped $1.03 to $9.85. The company reported that profits fell as it was hit by an industry slowdown and a mounting bill for legal fights.
Personal-care products maker Kimberly-Clark Corp. fell $1.14 to $53.89. The company, hurt by weak foreign currencies, said earnings would be below analysts' estimates and it lowered full-year guidance for the second time in three months.
The technology-rich Nasdaq Composite Index leaped ahead 103.70 points, or 5.26 percent, to end at 2,075.74 Thursday. This was the biggest percentage gain for the index since April 18, according to research firm MarketHistory.com.
The blue-chip Dow Jones industrial average jumped 237.97 points, or 2.32 percent, to 10,478.99. The broader Standard & Poor's 500 Index gained 27.96 points, or 2.37 percent, to 1,208.14. MarketHistory.com said the indexes saw their biggest percentage gains since May 16.