(by Dr. Goldfinger)
U.S. stocks climbed yesterday, led by semiconductor sector. The Nasdaq Composite rose to its highest level in nearly two months. The rally was limited by rising oil prices.
The Dow Jones industrial added 1.69 points, or 0.02%, to 10,314.76. The Standard & Poor’s 500 Index rose 1.90 points, or 0.17%, to 1,125.82. The Nasdaq Composite Index rallied up 16.07 points, or 0.85%, to 1,910.38, the highest level since July 20.
Crude oil was lifted on Thursday as Hurricane Ivan churned toward the Gulf of Mexico. Officials said 100,000 barrels per day of oil production and 266 million cubic feet of natural gas output had shut in the Gulf, Reuters said.
Many analysts expect U.S. shares rise may stop as the biggest companies’ quarterly profit forecasts have been cut. This quarter about 89 companies (or 60%) out of 149 having given previews of the third quarter results supposed their earnings to lower than expected. This is the highest figure since 2001. In spite of the fact that only 15% of the companies expected earnings forecasts lifted, specialists remain quite hopeful. “Estimates are still a bit optimistic. What it may mean is that stocks remain stuck in this range,’’ said Russ Koesterich, the chief U.S. equity strategist at State Street Global Markets in Boston.
This week traders wait economic data on retail sales, industrial production, consumer-price inflation Michigan sentiment index. But their impact on trading could be limited by the impression many market participants have that the recent data could be distorted by the hurricanes affecting the south-eastern US. In addition, the end of the week brings quadruple-witching, or the simultaneous expiry of options and futures for indices and stocks.
Analysts from Salomon Smith Barney wrote on Monday: "We continue to be tactically cautious as we think earnings concerns could interrupt the widely anticipated fourth-quarter rally."
National Semiconductor rose 4.4%, to $14.86, Advanced Micro Devices added 5.7%, to $12.90, Intel rose 1.1%, to $20.80. Broadcom rose 9% percent, to $30.30 after the company said its inventory glut would have a short-lived effect on its revenue.
The Philadelphia Stock Exchange semiconductor index rose 2.47%.
ChevronTexaco rose 1.8%, to $50.94, Exxon Mobil added 0.3%, to $47.50.
Shares of Metro-Goldwyn Mayer rose 4%, to $11.55 after reports that Japan’s Sony raised its offer to buy the entertainment group to $5bn and was close to taking control of the company, as Time-Warner pulled out of the contest to buy MGM.
US Airways fell 30%, to $1.02 after the company sought bankruptcy for the second time in two years. The airline failed to secure backing for its restructuring plans from unions.