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Stocks Set to Climb After Solid Earnings
Reuters
Thursday, February 19, 2004; 8:50 AM
By Denise Duclaux
NEW YORK (Reuters) - Stocks are set to climb at Thursday's open as strong earnings from chip gear maker Applied Materials Inc. and retail heavyweight Wal-Mart Stores Inc. feed investor hopes that share prices have room to rise.
"The earnings seem to be very impressive so far, and because of that we should really start today on a positive note," said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp.
Applied Materials, the world's largest producer of microchip-making equipment, on Wednesday after the close reported a better-than-expected quarterly profit and issued a profit target that outpaced analyst forecasts. Shares jumped to $23.96 before the bell after ending at $22.31.
Wal-Mart, a Dow component, before the open said quarterly profit rose 11 percent, meeting analyst expectations, as bitterly cold January weather drove demand for winter clothing. Stock of the world's biggest company by revenue headed up to $58 before the bell after a $57.20 close.
A government report before the open added to positive sentiment. The number of Americans lining up for initial jobless benefits took an unexpectedly sharp tumble last week from a level that had been boosted by cold weather.
"The market should view the weekly claims as positive for stocks, and we could get an early boost off the data," Flynn said.
Equity futures pointed to a firm start. Futures for the Standard & Poor's 500 gained 4.30 points to 1,155.50, futures for the Nasdaq 100 rose 11 points to 1,522 and futures for the Dow Jones industrials advanced 30 points to 10,705.
Wall Street will get more data on the economy throughout the day.
The Conference Board releases its report on January leading economic indicators at 10 a.m. Economists in a Reuters survey forecast a median 0.5 percent increase compared with a 0.2 percent rise in the prior month.
The Philadelphia Federal Reserve Bank releases February business activity index at 12 p.m. A survey of analysts polled by Reuters showed a median decline to 35.0 versus 38.8 in January.
Some analysts predict that January's gains will give way to a quiet market in the next few weeks. Since the stock market rally began last March, both the Dow and the S&P 500 have risen more than 40 percent, while the Nasdaq has gained 63 percent.
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