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Stocks Up on Earnings, Fed Decision Eyed
Reuters
Wednesday, January 28, 2004; 10:19 AM
NEW YORK (Reuters) - Stocks rose on Wednesday, lifted by a batch of robust earnings reports and widespread anticipation the Federal Reserve will leave interest rates unchanged at historically low levels.
Most investors also expect the Fed to reiterate its view that it does not plan to raise rates "for a considerable period." The Fed's policy-setting arm winds up its two-day meeting with a statement due at 2:15 p.m. EST (1915 GMT).
Low rates are good news for stock prices and the economy, since they help fuel corporate earnings growth by keeping a lid on borrowing costs.
Besides the Fed's announcement, investors continued to focus on a torrent of corporate earnings, most of which have either met or exceeded Wall Street expectations.
Positive earnings helped offset a weaker-than-expected reading on durable goods orders. New orders for long-lasting U.S. goods were unchanged in December, in a report that raised questions about the strength of the manufacturing recovery.
"The market's higher because of earnings news. The economic data wasn't great, with durable goods coming in flat as opposed to most folks looking for a rise," said John Caldwell, chief investment strategist at McDonald Financial Corp.
However, "we got a number of good solid earnings reports in a lot of different industries, and those companies are helping lift the broader market," Caldwell said.
The Dow Jones industrial average <.DJI> rose 36 points, or 0.34 percent, to 10,645.98. The Standard & Poor's 500 Index <.SPX> added 3.36 points, or 0.29 percent, to 1,147.41. The technology-laced Nasdaq Composite Index <.IXIC> gained 6.09 points, or 0.29 percent, to 2,122.13.
Time Warner Inc. topped the New York Stock Exchange's most active list, after it posted a fourth-quarter profit led by strong film and cable television results. A year ago it posted a huge loss after a big write-down for its America Online unit. Shares of Time Warner, the world's largest media company, declined 63 cents, or 3.35 percent, to $18.18.
On the Nasdaq, Flextronics International Ltd. jumped, after it reported late Tuesday a third-quarter net profit compared with a year-earlier net loss, as sales topped even the most optimistic analyst forecasts.
Flextronics shares rose 8.7 percent, or $1.48, to $18.55. The company also raised its sales and earnings projections for the fourth quarter and said current analyst estimates for the rest of the year are about 10 percent too low.
Procter & Gamble Co. , the largest U.S. consumer products company, helped prop up the blue-chip Dow, after it posted a 22 percent rise in quarterly profit before Wednesday's open. P&G shares rose 41 cents, or 0.4 percent, to $99.59.
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