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Wall Street Smiles on Good Economic News

Posted on: Friday, 15 July 2005, 21:00 CDT

Jul. 15--Three doses of good news helped propel stocks to gains Thursday, including a four-year high for the Standard & Poor's 500.

Positive readings on consumer prices and retail sales sent stocks up quickly after markets opened, and falling oil prices helped stocks recover from a slight afternoon dip brought on by profit-taking.

Among Kansas City area companies, Interstate Bakeries Corp. built on its gain of more than 12 percent Wednesday by tacking on a gain of almost 8 percent Thursday. Tax preparer H&R Block reached a 52-week high, while profit-taking knocked North Kansas City's Cerner Corp. from record highs.

The Dow Jones industrial average gained 71.50, or 0.68 percent, and closed at 10,628.89, the best close since March 18.

The Nasdaq composite index gained 8.71, or 0.41 percent, and closed at 2,152.82, inching back to positive territory for the year.

The S&P 500 index was up 3.21, or 0.26 percent, and closed at 1,226.50, its best close since finishing July 3, 2001, at 1,234.45.

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 index was unexpectedly flat for June, while "core" CPI -- with food and fuel costs removed -- edged just 0.1 percent higher.

Investors also cheered a sharp 1.7 percent jump in retail sales for June and a sharp drop in oil prices of $2.21 a barrel to a settling price of $57.80 on the New York Mercantile Exchange.

"This is just unalloyed good news, and no dark spots in there that I can see," Lincoln Anderson, chief investment officer of LPL Financial Services, told The Associated Press.

Retail stocks pushed higher on the positive Commerce Department sales report. Lowe's Companies Inc., Target Corp. and Best Buy Inc. all reached historic highs.

Apple Computer's earnings, reported after markets closed Wednesday, boosted the overall tech sector as the computer and electronics maker credited ongoing demand for the iPod for its record profits. Apple surged $2.40 to $40.75.

Advanced Micro Devices Inc. rose 63 cents to $19.88 after the chip maker reported a 65 percent drop in profits, yet still beat Wall Street profit forecasts by 8 cents a share.

In a rare bit of good news for the airline sector, Southwest Airlines Inc. had a 41 percent surge in profits for the second quarter. The company credited fare increases and rising passenger traffic for helping overcome rising fuel prices. Southwest climbed 44 cents to $14.42.

The struggling automotive sector also got a boost, with General Motors Corp. jumping $1.13 to $37 after analysts at Lehman Brothers upped the stock to "equal weight" from "underweight." Ford Motor Co. added 20 cents to $10.89. Both stocks benefited from strong auto sales reported in June.

Cerner was down $1.50, or 2.12 percent, at $69.25. Profit-taking brought share prices down from Wednesday's high of $72.60.

H&R Block was up 40 cents at $59.53. A late-morning push to $60 topped the previous 52-week high of $59.60. Shares last traded at $60 or more on Feb. 19, 2004.

Interstate Bakeries was up 60 cents, or 7.79 percent, at $8.30. The daily high of $8.75 was the best showing for shares since they hit $8.95 on Aug. 12, 2004, a little more than a month before the company sought bankruptcy protection.

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Copyright (c) 2005, The Kansas City Star, Mo.

Distributed by Knight Ridder/Tribune Business News.

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IBCIQ, HRB, CERN, LOW, TGT, BBY, AAPL, 6689, AMD, LUV, GM, F,

Source: The Kansas City Star (Kansas City, Missouri)

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