Wall Street was deeper into record territory in mid-afternoon trading Thursday. Investors had pocketed some cash earlier in the session following Thursday's 100-yard dash by blue-chip stocks, but soon decided to resume their shopping spree.
The Dow Jones Industrial Average rose 67.44 points to 10152.75, boosted by news from General Electric (GE) of a 14 percent hike in quarterly profit to a record 65 cents a share. But the result was pretty much in line with expectations, so traders gave a ho-hum reaction to GE's announcement, and the company's stock slipped 75 cents to US$113.75.
Yet another profit warning from Advanced Micro Devices (AMD) kept tech shares from galloping off with the blue chips. The chipmaker fell 63 cents to $15.56 after saying a production snafu will result in first-quarter sales being about $100 million less than anticipated. But it's not as though AMD hasn't been actively cushioning the blow for investors. The company said in February, and again last month, that it wouldn't be surprised by a loss for the quarter.
After all these profit warnings, it wouldn't be at all startling if AMD's stock were to go up after it finally breaks the bad news next week; anything less than bankruptcy at this point will be seen as a major plus.
After a slow start, tech stocks finally rebounded in the afternoon. The Wired Index gained 3.52 points to 678.43, and the Nasdaq Composite Index was 16.48 higher at 2560.91. The S&P 500 was up 11.87 at 1338.07.
The market's confidence was bolstered by word from the US Labor Department that fewer than 300,000 Americans filed for unemployment last week. That's 10 straight weeks the number has remained below the 300,000 threshold, and we haven't seen anything like that for a quarter-century.
The Old Country scored an assist as the European Central Bank lowered its benchmark interest rate by half of a percentage point, and the Bank of England chimed in with a rate cut of its own. Rate reductions over there can be a plus for exporters over here.
So let's talk Yahoo (YHOO). The portal padre eased $1.81 to $206.63 after topping estimates with quarterly profit of 11 cents a share, excluding charges. Seeing as a better-than-expected performance had been expected anyway, investors decided to take their time in scooping up additional shares. Yahoo's average daily pageviews jumped to 235 million in March from 167 million in December, while revenue tripled to $86.1 million.
This wasn't good enough for Brian Oakes, an analyst with Lehman Brothers. "There was a lack of revenue growth to keep pace with the pageview growth," he said. "It could mean a slowdown for portals." Oakes reiterated a "neutral" rating for Yahoo's stock. Yahoo-watchers over at Donaldson, Lufkin & Jenrette and Jefferies & Co. were a bit more generous. Both brokerages said the portal's share price should hit $300 in coming months.
And from the IPO front, Value America (VUSA) surprised absolutely no one with a splashy trading debut. The online retailer soared 161 percent to $60.06 after arriving with 5.5 million shares initially priced at a hefty $23 a throw. Value America lost nearly $54 million last year.
Sooner or later, you all realize, this sort of thing is going to have to stop.
