Stocks resume climb after stronger numbers from Best Buy, Qualcomm; Greek debt worries ease

By Tim Paradis, AP
Thursday, March 25, 2010

Stocks climb on forecasts from Best Buy, Qualcomm

NEW YORK — Stocks resumed their climb Thursday after upbeat forecasts from Best Buy and Qualcomm boosted expectations for the economy.

The advance came a day after a drop in the market interrupted a string of gains. The Dow Jones industrial average has risen in 10 of the past 12 days. It rose about 110 points in afternoon trading. Broader indexes also moved higher.

A rise in the dollar eroded some of the market’s advance after investors grew cautious about prospects for a bailout of Greece. Stocks rose early in trading on hopes that officials would hammer out a deal for the debt-strapped country. European nations planned to have an emergency summit late Thursday to complete a rescue plan that would involve the International Monetary Fund.

Investors have been concerned for months that problems in Greece and other debt-strapped countries in Europe would spread and spoil a global economic rebound.

The latest uncertainty about Greece weakened the euro and raised demand for the dollar. The climb in the dollar hit prices of commodities like energy. That, in turn, hurt shares of energy and materials stocks.

The worries about Greece and weak demand at a Treasury Department bond auction erased some of the enthusiasm over stronger earnings and a higher forecast from retailer Best Buy and a better-than-expected outlook from wireless chip maker Qualcomm. The companies’ reports raised hopes that consumer spending will increase. Higher sales of flat-panel TVs, laptop computers and smart phones are welcome signs for investors because consumer spending is the biggest driver of the economy.

Burt White, chief investment officer for LPL Financial in Boston, said growing confidence in the economy is deserved but that stocks have been rising too quickly in the past two months on light trading volume. That signals that relatively few traders have been generating the gains.

“This market is easier to move because a few buyers are doing it unopposed,” White said. “This comet that’s kind of shooting higher is slowly every day beginning to kind of lose some momentum.”

In early afternoon trading, the Dow rose 109.66, or 1 percent, to 10,945.81. The Standard & Poor’s 500 index rose 12.08, or 1 percent, to 1,179.80, while the Nasdaq composite index rose 30.75, or 1.3 percent, to 2,429.51.

Stocks have been climbing with little interruption since early February. The move higher has been largely due to economic reports showing slow but steady improvements in the economy.

A retreat Wednesday in stocks came after a credit rating agency lowered its rating on the debt of Portugal. That raised concerns that the country would default on its borrowings and trigger a wave of losses for investors.

Bond prices were little changed a day after a steep drop. Treasury prices tumbled Wednesday after a second straight bond auction drew weak demand. The government sold $32 billion in seven-year notes Thursday to tepid demand.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.89 percent from 3.86 percent late Wednesday.

The dollar fell against most other major currencies. On Wednesday, the dollar hit its highest level against the euro in 10 months.

Crude oil rose 44 cents to $81.05 per barrel in the New York Mercantile Exchange. Gold rose.

Among stocks, Best Buy rose $2.20, or 5.3 percent, to $43.38, while Qualcomm rose $2.45, or 6.1 percent, to $42.64.

Three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 512.8 million shares, compared with 488.1 million shares traded at the same point Wednesday.

The Russell 2000 index of smaller companies rose 9.28, or 1.4 percent, to 692.96.

Britain’s FTSE 100 gained 0.8 percent, Germany’s DAX index rose 1.6 percent, and France’s CAC-40 climbed 1.3 percent. Japan’s Nikkei stock average rose 0.1 percent.

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