US Stocks On Pace For Fifth Straight Gain
September 16 2011 - 4:04PM
Dow Jones News
U.S. stocks rose Friday, on pace for gains every day this week,
as investors are cautiously becoming more optimistic that Europe's
debt crisis won't spiral out of control.
The Dow Jones Industrial Average recently gained 45 points, or
0.4%, to 11478, in Friday afternoon trading. The index earlier had
advanced as much as 99 points before erasing some of those gains
after news that a euro-zone stability package could be delayed.
Procter & Gamble (PG) and Intel (INTC) led blue chips
higher, each rising more than 2%. But financials kept the gains in
check amid concern about Europe's debt crisis. Bank of America
(BAC) and J.P. Morgan Chase (JPM) weighed on the downside, dropping
2.6% and 1.4%, respectively.
The action comes as the Dow has risen every day this week. It is
up more than 4% for the week and has inched closer to turning
positive for the year.
Euro-zone finance ministers are trying to find common ground and
ease market tensions caused by the region's escalating sovereign
debt problems. U.S. Treasury Secretary Timothy Geithner also urged
them to overcome damaging divisions and remove "catastrophic risk"
from markets.
"In the short term, markets are encouraged that we are going to
once again avoid a crisis," said Michael Farr, president of
portfolio-management firm Farr, Miller & Washington. "But
there's no certainty of a successful outcome. The only certainty is
that consequences will not be met for some time."
The Standard & Poor's 500-stock index rose 3 points, or
0.3%, to 1212. The index is up more than 5% this week. Utility and
technology stocks were among the biggest advancers on Friday.
The technology-oriented Nasdaq Composite gained 7 points, or
0.3%, to 2614.
Friday's gains come a day after global markets soared on the
coordinated efforts of five major central banks to bolster the
European banking system. The surprise move calmed some fears, at
least for now, about the region's debt crisis.
"We've bought ourselves some time and we're looking for more
incremental news that a more permanent solution in Europe is under
construction," said Phil Orlando, equity strategist at Federated
Investors. "But we are absolutely hostage right now to what the
headline risk is on a number of fronts."
United Technologies (UTX) slipped 0.3% after Reuters reported
the industrial company is seeking financing in the credit market to
fund the acquisition of a U.S. company. The company is reportedly
seeking in the double-digit billions of dollars.
Among potential targets for United Technologies include aircraft
maker Textron (TXT), aerospace supplier Goodrich (GR) and smaller
rival Rockwell Collins (COL), according to Reuters. Textron rose
6.9%, Goodrich gained 7.8% and Rockwell Collins jumped 7%.
On the economic front, consumer-confidence figures beat
expectations but still remain at historically low levels.
"The baseline was a pretty low level to beat," said Jack Ablin,
chief investment officer at Harris Private Bank. "But confidence is
still down in the dumps."
In corporate news, Research In Motion (RIMM, RIM.T) tumbled 20%
after the BlackBerry maker reported late Thursday that quarterly
earnings and revenue fell short of expectations. The company
indicated gross margins for the current quarter will continue to
contract. Shipments of its PlayBook tablets also were
disappointing.
Texas Instruments (TXN) edged up 0.3% after the semiconductor
maker raised its quarterly cash dividend by four cents, or 31%, to
17 cents a share. The increase marked the eighth-straight year
Texas Instruments has increased its payout to shareholders.
Diamond Foods' (DMND) fiscal fourth-quarter earnings rose a
better-than-expected 27% as the packaged-food company gained from
stronger sales and a tax benefit. Shares rose 9.3%.
Yahoo (YHOO) has been contacted by potential bidders for some or
all of the Internet company. Private-equity firm Silver Lake
Partners reportedly is among the potential bidders that have called
Yahoo directors about a possible deal. Shares rose 1.1%.
-By Steven Russolillo, Dow Jones Newswires; 212-416-2180;
steven.russolillo@dowjones.com
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