By Chris Dieterich
Stocks rose Thursday after upbeat reports from Apple and
Facebook lifted technology shares.
The Dow Jones Industrial Average added 32 points, or 0.2%, to
16532, putting the blue-chip benchmark within striking distance
from its all-time closing high. On Wednesday, the Dow closed 0.5%
below its Dec. 31 record closing high of 16576.66.
The S&P 500 added six points, or 0.3%, to 1881. The
tech-oriented Nasdaq Composite Index climbed 29 points, or 0.7%, to
4155.
Tech shares were the top-performing sector after Apple, the
biggest U.S. company by stock-market value, late Wednesday reported
better-than-expected fiscal-second-quarter earnings and revenue.
Apple also increased its stock-buyback program, raised its dividend
and announced a seven-for-one stock split, lifting shares 7.7% on
Thursday.
Apple's report helped to soothe investors who have been hit hard
in recent weeks by declines in fast-moving tech and biotechnology
stocks. The Nasdaq finished Wednesday with a 2.4% loss over the
past month.
Apple's report "certainly helps bring people back to the tech
sector," said Robert Pavlik, chief market strategist at Banyan
Partners, which oversees $4.5 billion in assets. It "refocuses them
on the fact that there is still value to be had there," he
said.
Facebook added 2.1% after the social network late Wednesday
topped first-quarter earnings and revenue forecasts, as the company
continued to capitalize on its users' shift to mobile devices.
Caterpillar led gainers in the Dow, up 3.3%, after exceeding
earnings and revenue estimates.
With 41% of the S&P 500 having reported first-quarter
results through midday Thursday, overall earnings per share are now
seen falling 0.2% from year-ago levels, according to FactSet,
compared with expectations of a 1.4% decline when earnings season
started a little over two weeks ago.
After opening higher, stock briefly turned negative, with
traders attributing the morning slip from opening gains on
headlines about the Russian military launching exercises along
Ukraine's border.
Gold futures jumped and other haven investments, such as
Treasurys and the yen, also got a boost. These assets, which
investors see as safer than stocks and other bets that are more
sensitive to various risks, later pared gains.
Yousef Abbasi, New York-based market strategist at brokerage
JonesTrading Institutional Services, said that after sharp declines
in March and early April for previously highflying stocks, many
short-term traders have itchy trigger fingers.
"The fast money is still on edge," Mr. Abbasi said. "There
certainly is some tension out there: The market is holding near
all-time highs, and when nerves set in, people take profits."
Falling prices for 10-year Treasury notes pushed up the yield to
2.702%, from 2.686% late Wednesday. Gold futures added 0.3% to
$1,288.70 a troy ounce.
In deal news, Zimmer Holdings surged 13% after the company said
it agreed to buy privately held orthopedic-device maker Biomet Inc.
for about $13.35 billion in cash and stock.
Earlier in the week, William Ackman's Pershing Square Capital
Management and Valeant Pharmaceuticals disclosed an offer to buy
Botox maker Allergan, and GlaxoSmithKline and Novartis announced a
series of transactions, including Novartis' $14.5 billion purchase
of GlaxoSmithKline's oncology unit.
Investors digested mixed U.S. economic data. Initial claims for
jobless benefits rose 24,000 to 329,000 in the latest week, versus
expectations of 315,000. Separately, durable-goods orders in March
increased 2.6% on the month, the biggest gain in four months,
exceeding forecasts of a 2% rise.
In Europe, the Stoxx Europe 600 rose 0.3%. The German Ifo
business sentiment index for April rose to 107.3 from 106.4 in
March, topping forecasts of 105.9. European Central Bank President
Mario Draghi said Thursday the central bank may consider
broad-based asset purchases if consumer inflation remains too
low.
Asian markets were mostly lower, with China's Shanghai Composite
falling 0.5%, the fifth loss in six sessions, and Japan's Nikkei
Stock Average shedding 1%.
Crude-oil futures added 0.7% to $102.18 a barrel, after
suffering the biggest two-day decline in six weeks through
Wednesday. The dollar fell against the euro and the yen.
In other corporate news, 3M slipped 1.1% after results came up a
bit shy of forecasts.
Qualcomm slumped 4.2% after better-than-expected fiscal
second-quarter earnings were overshadowed by disappointing revenue
and a downbeat current-quarter earnings outlook.
General Motors gained 0.6% after reporting much
better-than-expected first-quarter earnings, while United Parcel
Service lost 1.7% after missing earnings estimates.
Write to Chris Dieterich at christopher.dieterich@wsj.com