GM, Merck boost Dow; Nasdaq off
Stocks closed mixed Thursday after earnings reports from General Motors Corp. and Merck Co. Inc. pushed the Dow Jones industrial average up to a six-year high while the Nasdaq composite sagged along with eBay Inc.
Dow component General Motors’ stock gained 10 percent after the automaker reported record revenues along with its sixth straight quarterly loss. Drugmaker Merck & Co., also a Dow component, reported an 11 percent jump in first-quarter profit.
Google Inc.’s first-quarter earnings, reported after the close of regular trading, sent the stock sharply higher in after-hours trading and pointed to greater investor enthusiasm Friday.
In economic news, new applications for unemployment benefits dropped by 10,000 to 303,000, according to the Labor Department. The figure was the best showing since the beginning of April, suggesting the labor market is maintaining decent momentum, but reviving the fear of wage inflation.
Oil futures retreated from record highs. A barrel of light crude hit a record high of $72.49 in trading on the New York Mercantile Exchange before falling to $71.95, down 22 cents from Wednesday’s record closing price.
“The message this week is pretty simple: People are looking for an excuse to buy stocks rather than sell stocks,” said Ryan Larson, equity trader at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. “A year ago, $70 oil would have been the death of us; today, the market is able to digest it and look for positives.”
The Dow rose 64.12, or 0.57 percent, to 11,342.89. That was the blue chips’ best close since it settled at 11,351.30 on Jan. 20, 2000.
Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 1.53, or 0.12 percent, to 1,311.46, and the Nasdaq composite index fell 8.33, or 0.35 percent, to 2,362.55.
The advances masked underlying weakness in the market. Declining issues led advancers by roughly 8 to 7 on the New York Stock Exchange.
Bonds were lower, with the yield on the 10-year Treasury note rising to 5.04 percent from 5.03 percent Wednesday. The U.S. dollar was higher against most major currencies. Gold prices were lower, retreating from 25-year highs.
Economic data continued to point to moderating growth. The Conference Board, a private research group, said its Index of Leading Economic Indicators dropped to 138.4 in March from 138.5 the previous month. The index is a closely watched gauge of future economic activity.
Preliminary consolidated volume on the New York Stock Exchange came to 2.58 billion, up from 2.51 billion at the same time Wednesday.
The Russell 2000 index of smaller companies fell 3.75, or 0.48 percent, to 774.67.
Overseas, Japan’s Nikkei stock average fell 0.19 percent. Britain’s FTSE 100 lost 0.14 percent, Germany’s DAX index gained 1.16 percent, and France’s CAC-40 rose 0.94 percent.