Dow Post First Positive Week in Two Months

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.

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