Wall Street rebounds to end three-day drop as Microsoft gains
Trader Robert Hannan works on the floor of the New York Stock Exchange August 7, 2013. REUTERS-Brendan McDermid
By Chuck Mikolajczak
NEW YORK | Thu Aug 8, 2013 6:35pm EDT
(Reuters) - Stocks advanced on Thursday, snapping a three-day losing skid as a rally in Microsoft helped lift the technology sector.
The three major U.S. stock indexes shook off early losses as Microsoft shares (MSFT.O) climbed. The stock closed up 2.6 percent at $32.89 in heavy volume. The S&P information technology sector index .SPLRCT rose 0.4 percent.
Shares of Tesla Motors Inc (TSLA.O) jumped 14.3 percent to $153.48 a day after the electric car maker posted an unexpected quarterly profit. The stock has been a major momentum favorite this year, up almost 350 percent in 2013.
"There definitely seems to be some big runners. Microsoft was up quite a bit," said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.
"It could be people decided there are some bargains out there. It's kind of odd that we had a fair amount of this tapering talk the past few days. So I'm surprised in that regard that people have decided to step back in."
Stocks had inched lower much of this week, pulling back from last week's record levels, on concerns that the Federal Reserve will start to reduce its stimulus efforts this year as the economy recovers. Gains in equities have been closely linked to the Fed's stimulative policy, and many investors are worried that economic growth may stall without the Fed's intervention.
In the latest comments from a Fed official, Richard Fisher, president of the Federal Reserve Bank of Dallas, reiterated that the central bank will probably begin cutting back on its massive bond-buying stimulus next month, as long as economic data continues to improve.
The Dow Jones industrial average .DJI rose 27.65 points or 0.18 percent, to end at 15,498.32. The S&P 500 .SPX gained 6.57 points or 0.39 percent, to 1,697.48. The Nasdaq Composite Index .IXIC added 15.115 points or 0.41 percent, to 3,669.124.
Volume was once again light, with about 5.81 billion shares traded on the New York Stock Exchange, the NYSE MKT and the Nasdaq, below the daily average of 6.35 billion. Volume has yet to climb above 6 billion for any trading day this week.
Groupon Inc (GRPN.O) shares soared 21.6 percent to $10.60. Late Wednesday, the online coupon company reported revenue that exceeded expectations and named its co-founder as chief executive.
JPMorgan Chase & Co (JPM.N) was among the Dow's worst performers. The stock fell 0.9 percent to $54.83. JPMorgan Chase, which is the biggest U.S. bank ranked by assets, faces a criminal probe by the U.S. Department of Justice over sales of mortgage-backed securities.
Data showed U.S. weekly jobless claims rose less than expected to 333,000 in the latest week, while the four-week average fell to 335,500, its lowest level since before the recession in 2007 through 2009.
Orbitz Worldwide Inc (OWW.N), an online travel agency, reported higher-than-expected quarterly earnings as it sold more hotel and vacation packages, and forecast full-year revenue above analysts' estimates. Orbitz shares surged 36.7 percent to $12.62.
After the closing bell, Priceline.com (PCLN.O) shares rose 5.1 percent to $981.46 after the online travel agency said quarterly profit rose on improved hotel and car-rental reservations. The stock had ended regular trading at $933.75, up 0.7 percent ahead of its earnings.
Of 442 companies in the S&P 500 that had reported earnings through Thursday morning, Thomson Reuters data showed that 67 percent topped analysts' expectations, matching the beat rate over the past four quarters. In terms of revenue, 53.6 percent exceeded estimates, more than the 48 percent rate over the past four quarters, but below the 61 percent average since 2002.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 2 to 1, while on the Nasdaq, three stocks rose for every two that fell.
(Editing by Jan Paschal)
