Bulls Win in Wall Street Tug of War
FOX Business: The Power to Prosper
The Nasdaq posted significant gains on the day, while the blue chips managed to eke out slight gains in choppy trading.
The Dow Jones Industrial Average gained 8.1 points, or 0.07%, to 12,403, the S&P 500 was up 5.2 points, or 0.4%, to 1,326 and the Nasdaq Composite climbed 21.5 points, or 0.78%, to 2,783. The FOX 50 was up 1.8 points to 924.
Individual shares helped traders overcome downbeat data on the state of the U.S. labor market and economic expansion.
Prominent hedge fund manager David Einhorn of Greenlight Capital called on Microsoft (NASDAQ:MSFT) Chief Executive Steve Ballmer to step down, saying he is stuck in the past. The technology giant's stock was up more than 2% on the news.
High-end jewelry retailer Tiffany & Co. (NYSE:TIF) unveiled a 26% increase in first-quarter earnings, sending shares to an intraday all-time high. NetApp (NASDAQ:NTAP), a technology firm specializing in data management and storage, also reported solid earnings, sending shares soaring.
Not all corporate news was positive, however. Sony (NYSE:SNE) unveiled a roughly $3.2 billion loss for its fiscal year ended March 2011, the electronic giant's biggest net loss in 16 years. However, the company expects to make a profit of $976 million in the current fiscal year.
The second revision of U.S. gross domestic product showed the economy expanded at an annualized rate of 1.8% in first quarter of 2011, the same as the first reading, according to the Commerce Department. However, the reading was well below Wall Street's estimates of 2.1%. U.S. GDP increased by 3.1% in the last quarter of 2010.
Many economists are already beginning to look the current-quarter growth. Indeed, economic growth in the second quarter could be dampened by "suffocating effect of high commodity prices, combined with the hit to the motor vehicle sector from the supply constraints resulting from Japan's natural disaster," according to Nigel Gault, chief U.S. economist at IHS Global Insight.
Also on the economic front, 424,000 people filed for unemployment benefits in the prior week, up from a revised 414,000 the week before, and well above forecasts of 400,000.
"Lackluster remains the theme with the labor market," wrote Peter Boockvar, managing director at Miller Tabak + Co., in a research note. "Jobs are being created but there is a certain lack of vibrancy at this point in the economic rebound."
Initial jobless claims suddenly spiked over the 400,000 mark over the last couple of weeks, but many analysts have blamed a series of temporary factors for the increase.
Generally, claims under 400,000 are considered to point to moderate recovery in the labor market.
Commodity markets were mixed after rallying in the prior session, with market participants eyeing a weakening U.S. dollar. The greenback was off 0.48% against a basket of world currencies, and the euro gained 0.31% against the dollar.
Light, sweet crude fell $1.09, or 1.1%, to $100.23 a barrel. Wholesale RBOB gasoline was up 3 cents, or 1.1%, to $3.05 a gallon.
On the consumer level, a gallon of regular gas cost $3.81 on average nationwide, down from $3.87 last month, but considerably higher than $2.77 last year, according to the AAA Fuel Gauge Report.
In metals, gold was lower by $3.00, or 0.2%, to $1,524 a troy ounce. Silver dropped 31 cents, or 0.83%, to $37.33 a troy ounce.
Market participants were also keeping a close eye on the European sovereign debt crisis. Greece was been struggling to repay its nearly half a trillion dollar public debt load. The idea of a soft restructuring, wherein maturity dates for bonds are pushed back, but bondholders don't take haircuts, have been floated, but repeatedly denied by officials.
International Monetary Fund Chief Economist Olivier Blanchard said Thursday a restructuring isn't a "magic bullet" and isn't inevitable. He also noted a restructuring wouldn't affect the worldwide economic recovery in a substantial way, but it could possibly pose contagion risks to other countries.
Honda Motors (NYSE:HMC) said it would increase production volume in its North American plants in August to the rate before the devastating tsunami and earthquake slammed Japan. The increase, the automaker said, does not apply to 2012 civic models, which will continue at half of original volume.
Viacom (NYSE:VIA) boosted its quarterly dividend by 67% to 25 cents a share.
Nokia (NYSE:NOK) forged a partnership with CNN to provide mapping services for the news network.
Arena Pharmaceutical's (NASDAQ:ARNA) weight loss Drug, Lorcaserin, showed statistically significant weight loss in a late-stage clinical trial of obese and overweight patients, sending shares soaring. The pharmaceutical company plans on seeking approval from European regulators next year.
The English FTSE 100 was up 0.18% to 5,881, the French CAC 40 was down 0.3% to 3,917 and the German DAX was off 0.79% to 7,114.
In Asia, the Japanese Nikkei 225 soared 1.5% to 9,562 and the Chinese Hang Seng edged higher by 0.67% to 22,901.