FOX Business: The Power to Prosper
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The Dow closed the week at its highest level since June 2008 after upbeat corporate earnings lifted traders' confidence.
The Dow Jones Industrial Average gained 52.4 points, or 0.42%, to 12,506, the S&P 500 was up 7 points, or 0.53%, to 1,337 and the Nasdaq Composite climbed 17.7 points, or 0.63%, to 2,820. The FOX 50 was higher by 2.4 points to 936.
The markets closed out the shortened trading week with solid gains, following two relatively quiet weeks. The Dow and S&P 500 gained 1.3% and the technology-heavy Nasdaq added on 2%.
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Manufacturing in the Mid-Atlantic region continued expanding in April, but at a far slower pace than in the prior month, a report released Thursday showed.
The Philadelphia Federal Reserve's manufacturing index slumped to 18.5 from 43.4 in March, far below Wall Street's expectation of a reading of 35. Readings above zero represent expansion.
Despite the considerable downtick, the April reading "is consistent with a healthy pace of improvement," wrote Nicholas Tenev, an economist with Barclays Capital, in a research note.
The report also lent credence to the fears of some economists that rising commodity prices are seeping into the broader price level. "Firms continue to report price increases for inputs as well as their own manufactured goods," the report from the Philadelphia Fed said.
The number of individuals filing for unemployment benefits fell to 403,000 from 416,000 in the prior week, still well above the consensus view of 392,000.
This week's report "merits close attention" as the number of weekly claims for jobless benefits is teetering close to the important 400,000 threshold, according to economists at Deutsche Bank. The four-week moving average, which helps mitigate some volatility, actually increased from 396,750 to 399,00 in the prior week. Generally, economists see readings under the 400,000 mark pointing toward moderate improvement in the labor market.
The steady stream of forecast-beating earnings continues. General Electric (GE) said it earned 33 cents a share in the first quarter, easily beating Wall Street's forecast of 28 cents a share. The largest U.S. conglomerate also boosted its dividend by a penny to 15 cents.
McDonald's (MCD) revealed earnings of $1.15 a share, edging out estimates by a penny. The fast food chain's bottom-line benefited from same-store sales growth abroad.
Biotechnology-firm Biogen's (BIIB) earnings jumped 35% in the first quarter, and said its new oral multiple sclerosis drug MG-12 showed strong effectiveness, poising the company to be competitive in the growing market for oral MS treatments. Shares of Teva Pharmaceuticals (TEVA), which is developing a rival drug -- (TEVA) tumbled to a 12-month low on the news.
Apple (AAPL), the largest technology company in the world, unveiled fiscal second-quarter profits of $6.40 a share, zipping past expectations of $5.37 after the bell Wednesday.
However, despite generally positive earnings, not all corporate news was good Thursday. Pfizer (PFE) shares tumbled more than 4% on news four patients died during trials of Tofacitinib, an experimental Rheumatoid Arthritis drug.
Analysts are also keeping a close eye on the effects of the crisis in Japan on U.S. economic growth. Indeed, Goldman Sachs released a research note Thursday saying it expects vehicle production in North America to decline 10% in the second quarter, mostly due to a shortage of microcontrollers used in cars. These tiny devices are considered high-value items so companies generally keep small inventories of them, potentially creating a bottleneck for broader production, the investment bank said.
In energy markets, oil have soared 22.9% since the start of 2011 and have now advanced four of the last five weeks, gaining 1.9% this week alone.
Light, sweet crude settled higher by 84 cents, or 0.75%, to $112.29 a barrel. Gasoline prices at the consumer level have been stable the last two days, but remain elevated. A gallon of regular gas cost $3.84 on average nationwide, up from $3.55 last month and $2.86 last year.
Weakness in the U.S. dollar generally puts upward pressure on oil prices. The greenback recently slipped 0.36% against a basket of world currencies and the euro gained 0.17% against the greenback.
Gold climbed $17.90, or 1.2%, to $1,503 a troy ounce on the week, finishing the day at yet another record-high. The precious metal is 4.5% for the year.
Elsewhere in corporate news...
Microsoft (MSFT) plans on increasing employee compensation as rivals attempt to tap into key talent.
Mattel (MAT), the largest U.S. toy company, was dealt a surprising defeat in a lawsuit it brought against MGA Entertainment over who owns the rights to the lucrative Bratz dolls line.
Groupon hired Margo Georgiadis, currently Google's (GOOG) vice president of global sales and technology, to take on the role of Chief Operating Officer, according to a report by Crain's Chicago Business.
NYSE Euronext (NYX) once again rebuffed the rival merger bid levied by Nasdaq OMX (NDAQ) and IntercontinentalExchange (ICE). The parent of the New York Stock Exchange said it believes the original offer from Deutsche Boerse offers significantly more value for shareholders than the Nasdaq/ICE deal.
Monex, a Japanese online Brokerage, plans on buying U.S.-based TradeStation (TRAD) for $411 million, or $9.75 a share -- a 32% premium.
Global shares were mixed after soaring in the prior session.
The English FTSE 100 was down 0.07% to 6,018, the French CAC 40 gained 0.43% to 4,022 and the German DAX traded higher by 0.43% to 7,295.
In Asia, the Japanese Nikkei 225 jumped 0.82% to 9,686 and the Chinese Hang Seng climbed 1% to 24,138.