Modest rise for US stocks
US investors cautiously bid stocks narrowly higher today, cheered by a recovering dollar and moderating oil prices.
Volume was light, however, as many investors kept to the sidelines waiting for Cisco Systems’ earnings after the session.
The dollar struck a two-month high against the Japanese yen, but fell against the euro after two days of gains, while oil prices hovered near $45 per barrel. A barrel of light crude closed at $45.40, up 12 cents, on the New York Mercantile Exchange.
Wall Street’s focus, however, was on Cisco, and that kept many investors from making large bets during trading hours. The networking giant’s fourth-quarter profits were in line with Wall Street expectations, which ended up disappointing investors.
“Cisco is of course a benchmark, and I think investors are hoping that these earnings will tell them something about the economy,” said Sam Lieber, president of the Alpine Funds. “Still, you have to look at the overall picture. Cisco is a part of that, but it’s not what it used to be.”
The Dow Jones industrial average rose 8.87, or 0.1%, to 10,724.63.
Broader stock indicators also moved slightly higher. The Standard & Poor’s 500 index was up 0.58, or 0.05%, at 1,202.30, while the Nasdaq composite index gained 4.65, or 0.2%, to 2,086.68.
With little new economic data available this week, earnings reports have taken on additional importance.
Cisco’s net income rose 93 cents from a year ago, but its revenues fell short of expectations. Shares of Cisco added 8 cents to $18.24 during the session, then tumbled 61 cents to $17.63 in electronic after-market trading minutes after its earnings were released
Shares of semiconductor companies rose after an analyst with SG Cowan said the inventory buildups that have plagued chip makers abated in the fourth quarter. Dow component Intel rose 50 cents to $23.41, while rival Advanced Micro Devices gained 42 cents to $17.64.
Aluminium producer Alcan lost 94 cents to $38.08 after dropping to a loss in the fourth quarter, spurred by large one-time charges related to acquisitions and currency exchange. The Canadian company blamed higher material costs and a weak US dollar for the disappointing quarter.
Hotel chain Marriott International reported a 12% rise in quarterly earnings, fuelled by a strong showing in its conference and group lodging efforts. Marriott, which beat analysts’ estimates by 4 cents per share, nonetheless slid 76 cents to $65.74 on a weak 2005 outlook.
Dow component McDonald’s said sales at stores open at least a year rose 5.2% in January.
Slower growth in US restaurants was offset by strong sales in Europe and Asia. McDonald’s dropped 36 cents to $32.42.
Advancing issues slightly outnumbered decliners on the New York Stock Exchange, where volume was moderate.
The Russell 2000 index of smaller companies was up 2.10, or 0.3%, at 638.72.
