Archive for Friday, July 15, 2005

Earnings, inflation data spur buying

Standard & Poor’s reaches four-year high

July 15, 2005


— A trifecta of good news - positive economic data, strong earnings and a sharp drop in oil prices - sent stocks sharply higher Thursday and lifted the Standard & Poor's 500 index to a four-year high. The Nasdaq composite index also moved into positive territory for 2005.

Wall Street was encouraged by the latest reading of the Labor Department's Consumer Price Index, which measures how much consumers pay at the retail level. The CPI was unexpectedly flat for June, while "core" CPI - with food and fuel costs removed - edged just 0.1 percent higher.

Record earnings from Apple Computer Inc. also cheered investors, while a sharp 1.7 percent jump in retail sales for June assuaged fears that high oil prices would crimp consumer spending.

"This is just unalloyed good news, and no dark spots in there that I can see," said Lincoln Anderson, chief investment officer at LPL Financial Services.

The S&P; rose 3.21, or 0.26 percent, to 1,226.50, its best showing since closing at 1,234.45 on July 3, 2001.

Other stock indicators also advanced. The Nasdaq composite index climbed 8.71, or 0.41 percent, to 2,152.82 - its best close since Dec. 31 - while the Dow Jones industrial average was up 71.50, or 0.68 percent, at 10,628.89, its highest level since March 16.

Bonds moved lower as stocks rose, with the yield on the 10-year Treasury note rising to 4.18 percent from 4.16 percent late Wednesday. .

Crude oil futures dropped sharply after the International Energy Agency predicted global demand would ease. A barrel of light crude settled at $57.80, down $2.21, on the New York Mercantile Exchange.


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