NEW YORK, May 16 (UPI) -- Stock prices on the New York Stock Exchange and Nasdaq Stock Market ended higher Thursday, lifted by favorable corporate earnings news.
Though the Nasdaq continued its fourth day of gains, prices were little changed, with any further rallies kept in check by bouts of profit-taking following three days of gains.
The blue-chip Dow Jones industrial average, which lost 54.46 points Wednesday, gained 45.53 points, or 0.44 percent, to close at 10,289.20. The tech-heavy Nasdaq composite index, which added 6.51 points in the previous session, gained 4.87 points, or 0.28 percent, to close at 1,730.43
The broader New York Stock Exchange composite index ended up 2.14 point to close at 581.68 while the Standard & Poor's 500 index gained 7.16 points to close at 1,098.23.
The American Stock Exchange composite index gained 0.57 points to close at 953.59 while the Wilshire 5000 Index ended up 35.30 to 10,403.16.
Volume was 1.37 billion on the Big Board and 1.56 billion on the Nasdaq Stock Market.
Market volume was negative with decliners beating advancers by 17 to 13 on the NYSE and decliners beating advancers by 19 to 15 on the Nasdaq.
Analysts said the blue chips rose as investors digested two new reports on the economy, comments from a Federal Reserve official and some favorable earnings news.
Michael Moskow, president of the Federal Reserve Bank of Chicago, said uncertainty lingers over the early shape of the nation's economic recovery though the economy is on track for moderate growth and the long-term outlook is good.
"While certain sectors of the economy are still experiencing hard times, overall activity has recovered from the recession we suffered last year and we appear to be on our way to a moderate expansion," Moskow said.
Moskow currently does not vote on the Fed's policy-setting committee.
"Still, we are facing a good deal of uncertainty over how the early stages of this expansion will unfold," he said.
Moskow's comments reiterated the cautious stance of other Fed officials and suggested that the central bank remains reluctant to hike interest rates until it sees more evidence of a robust economic recovery.
Recent economic reports have been mixed, adding to worries the recovery could falter.
The Chicago Fed chief said some signs of improvement in business investment have emerged, and even the battered technology sector appears to be stabilizing.
The Fed's current policy of keeping interest rates at a four-decade low of 1.75 percent is accommodative, Moskow said, and the central bank cannot maintain such a policy "forever" without risking a flare-up in future inflationary pressures.
But inflation remains well contained and gives the central bank "more room to react to a slow recovery, should it unfold," he said.
Meanwhile, on the economic front, the Labor Department said new claims for state unemployment benefits posted their first increase in a month during the week ended May 11 while the number of people receiving benefits climbed to their highest level in 19 years.
Labor said new claims for state unemployment rose by 2,000 to a seasonally adjusted annual rate 418,000.
Economists on Wall Street were expecting first-time claims to decline by 6,000 during the week.
The Commerce Department said U.S. housing starts fell 5.4 percent in April to a seasonally adjusted annual rate 1.55 million units. Economists on Wall Street were expecting housing starts to fall 1.3 percent during the month.
On the corporate front, investors focused on technology stocks, following somewhat guarded comments from IBM and ahead of quarterly results from Dell Computer.
IBM told analysts late Wednesday that it will take aggressive steps to strengthen its existing lines, such as personal computers and hard drives, while expanding its service offerings. New Chief Executive Officer Samuel Palmisano also hinted at job cuts; there's been speculation that about 8,000 jobs could be cut, mostly in the United States.
Meanwhile, Dell Computer, the largest maker of personal computers, is due to report earnings after the close of trading. Dell is expected to post a net income of 16 cents a share, down from 17 cents a share a year earlier.
U.S. Treasury prices inched higher. The 10-year bond rose 17/32. Its yield, which moves in the opposite direction of its price, slipped to 5.17 percent from 5.24 percent late Wednesday.
In Europe, stock prices ended lower in light trading in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index eased 6.9 points, or 0.13 percent, to 5,252.2. The German DAX index eased 10.78 points, or 0.21 percent, to 5,061.61 and the French CAC-40 index eased 4.91 points, or 0.11 percent, to 4,466.36.
Analysts said European stocks drifted lower, pressured by weakness in telecom issues and banks.
Telecom issues came under pressure after British telecom equipment maker Marconi said it may ask creditors to exchange debt for control of the company. Marconi's bankers and bondholders are owed $5.8 billion and any swap could see shareholders owning little or nothing of the company.
Bank stocks came under pressure after disappointing earnings results from French bank Societe Generale.
Societe Generale, France's second largest bank by market capitalization, posted a larger than expected drop of 24 percent in first quarter net profits on a steep drop in investment banking income.
Earlier in Asia, prices on the Tokyo Stock Exchange ended higher for the third consecutive session, lifted by strength in the banking and telecommunication sectors. Japan's blue-chip Nikkei Stock Average of 225 selective issues, which jumped 286.78 points Wednesday, rose another 95.72 points, or 0.82 percent, to 11,738.69.
Analysts said stocks were lifted by strength in telecommunication issues, banks and major exporters.
Banks rose amid expectations that the Japanese economy would stage a slight recovery this year.
The market was also lifted by renewed signs that the economy in the United States is on the path to recovery, after manufacturing and retail sales improved.
Elsewhere in Asia, prices ended slightly lower on the Hong Kong Stock Exchange after the main index failed to break a psychological resistance level of 12,000 in the previous session. The blue-chip Hang Seng Index slipped 5.59 points, or 0.1 percent, to 11,832.77, well off its worst level of the session of 11,762.25.
Looking ahead, analysts said the market is expected be quiet on Friday ahead of a public holiday next Monday and will likely trade in a range.
Meanwhile, prices ended slightly lower in moderate trading on the South Korean Stock Exchange, pressured by profit-taking and weakness in technology issues. The Kospi Composite Index slipped 4.58 points, or 0.53 percent, to 858.04.
Prices also ended lower on the Taiwan Stock Exchange, pressured by weakness in the technology sector. The Weighted Index fell 109.22 points, or 1.85 percent, to 5,801.47. The index has lost 4.6 percent in the last four weeks, making it the worst performer in the region.
Elsewhere in the Pacific region, prices ended higher on the Australian Stock Exchange, lifted by some upbeat outlook comments from blue chip companies. The blue-chip All Ordinaries Index, which jumped 61.60 points Wednesday, rose another 18.50 points, or 0.56 percent, to 3,343.20.
