New York An upbeat earnings outlook from retailer Sears, Roebuck lifted Wall Street out of its malaise Wednesday, sparking a broad rally across the market on hopes that profits are improving and that higher stock prices will prove justified.
The Dow Jones industrials rose more than 170 points, the biggest gain in more than a month. But analysts were skeptical the momentum would last, noting that earnings season is just beginning and Wall Street has yet to see a preponderance of companies confirm that business is turning around. The Dow closed up 173.06, or 1.7 percent, at 10,381.73, ending a two-session losing streak.
Investors bid Sears up $2.98, or 5.8 percent, to $54.18 after the retailer indicated its first-quarter results would be better than expected because of better inventory controls and other organizational changes, although revenues remain soft.
The buying momentum quickly spread across the market, including the tech sector.
Cisco and IBM rebounded despite concerns about the tech bellwethers' earnings. IBM gained $1.27 to $89.01 after sliding on a profit and revenue warning Monday. Cisco rose 73 cents to $15.55, recovering some of its loss Tuesday on speculation it would reduce its forecast.
Still, Oracle dropped 43 cents to $11.55 on investors' belief that the software maker's earnings would be lower than expected. Concern about disappointing earnings also plagued WorldCom, which fell 63 cents to $4.77.
And brokerage stocks slipped after the state of New York said it was expanding its investigation into alleged conflicts of interest involving Wall Street analysts. Merrill Lynch, which was publicly identified as a target of the probe Monday, fell $1.17 to $50.92.