Stocks finished higher Tuesday, as gains in some technology and brokerage stocks helped offset caution ahead of the Federal Reserve meeting and Iraq handover at month-end.
The Dow Jones industrial average rose 23.6 points, or 0.23%, to 10,395.07. The broader Standard & Poor's 500 index was up 4.11 points, or 0.36%, to 1,134.41. The tech-heavy Nasdaq composite index climbed 19.77 points, or 1%, to 1,994.15, helped by strength in communications equipment, Internet software, and semiconductor outfits.
Internet software stocks got a boost after CS First Boston raised its estimates and price target on Yahoo! (YHOO). CSFB says that based on the most recent advertising and search data from Nielsen and advertising channel checks, it believes that growth in the online advertising market is accelerating.
Shares of PalmOne (PLMO), maker of Palm Pilots, surged about 38% on stellar May quarter results.
Network storage maker QLogic (QLGC) was higher Tuesday on news that Merrill Lynch upgraded the stock to buy from neutral.
Investment banks were in focus as Morgan Stanley (MWD) and Goldman Sachs (GS) beat Wall Street earnings estimates in their May quarter results. Both of their stocks rose, brushing off concern about the outlook given a rising rate environment and poor trading volumes.
Other companies reporting earnings Tuesday were Kroger (KR), Darden Restaurants (DRI), and 3Com (COMS).
Companies on Wednesday's earnings calendar include FedEx (FDX), Bed Bath & Beyond (BBBY), Micron Technology (MU), Kerr-McGee (KMG), Worthington Industries (WOR), and more.
Among the weak areas on Tuesday, Wal-Mart (WMT) stock was down about 2%, weighing on the Dow average, after a federal judge granted a sex discrimination lawsuit class action status. The case would be the largest civil-rights action ever brought against a private employer in the U.S., according to news reports.
General merchandise retailers fell after ST Robinson Humphrey downgraded Family Dollar Stores (FDO) from buy to neutral in front of the company's third-quarter earnings release Thursday morning.
SCP Pool (POOL) rose after the company raised its 2004 EPS estimate to $1.70 to $1.75, citing strong sales growth in its southern markets, especially in the western part of the U.S.
In deal news, Dick's Sporting Goods (DKS) agreed to acquire Galyan's Trading (GLYN) in a tender offer of $16.75 in cash per Galyan's share.
There were no major economic releases on Tuesday. The economic calendar is busier at the end of this week, starting with a read of durable goods orders for May on Thursday. Traders will also get their weekly dose of initial jobless claims, plus a read on new home sales for May. Friday delivers the final gross domestic product figures, as well as Michigan's consumer sentiment survey results for June and existing home sales.
Treasuries ended lower in price Tuesday, with the yield on the benchmark 10-year note rising to 4.70%. Another lackluster session kept the bond market nailed down in painfully tight ranges, with little or no data to go on and only a slight concession to corporate and sovereign supply, says Action Economics.
European stock markets finished lower on Tuesday. London's FTSE 100 index was down 33.7 points, or 0.75%, to 4,468.5.
Germany's DAX index lost 60.92 points, or 1.53%, to 3,928.39 even though the German ZEW institute economic sentiment index rose to 47.4 in June from 46.4 in May. In Paris, the CAC 40 index fell 39.96 points, or 1.07%, to 3,700.32 as French May consumer spending fell 0.2%.
In Japan, the Nikkei index declined 18.89 points, or 0.16%, to close at 11,581.27, held back by profit-taking in techs, auto names, and retail stocks. Brokerage names also trended lower, with Nikko Cordial tanking on news that Citigroup would almost halve its stake in the brokerage.
The market in Hong Kong was closed Tuesday for the Tuen Ng Festival.