u.s. stocks climb, banks rise, oil stabilizes

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    U.S. stocks climb, banks rise, oil stabilizes
    AAP News
    8:50:020 19/01/2005
    (Updates to close)
    By Megan Davies
    NEW YORK, Jan 18 (Reuters) - U.S. stocks climbed Tuesday
    after several banks, including Bank of America Corp., posted
    higher fourth-quarter profits, while a stabilization in oil
    prices eased worries about steep energy costs.
    Oil prices erased earlier gains, with U.S. February crude
    futures settling unchanged at $48.38 a barrel -- reversing an
    initial climb to $49.50 as a bitter cold front swept across the
    U.S. Northeast.
    Among a slew of companies reporting earnings was Bank of
    America, the No. 3 U.S. bank, which closed up nearly 2 percent,
    or 84 cents to $45.73 after it reported a 41 percent rise in
    fourth-quarter profit.
    After the closing bell, International Business Machines
    Corp. posted a quarterly net profit that beat Wall Street's
    recently raised target as solid year-end product sales were
    buoyed by a weaker U.S. dollar.
    Shares of Big Blue rose 60 cents, or 0.6 percent, to $95.50
    in post close trading on the Inet electronic exchange. IBM
    closed up 80 cents at $94.90 during the regular session.
    The Dow Jones industrial average finished up 70.79 points,
    or 0.67 percent, at 10,628.79. The Standard & Poor's 500 Index
    rose 11.46 points, or 0.97 percent, to 1,195.98. The Nasdaq
    Composite Index was up 18.13 points, or 0.87 percent, at
    2,106.04.
    The Dow, S&P and Nasdaq closed at their highest levels in
    about two weeks.
    "Across the board, you're seeing some money coming into the
    market," said Michael Murphy, managing director at Wachovia
    Securities. "There weren't a lot of people around in the early
    part of the year and now people are coming back in, they're
    looking around. Earnings numbers are coming in pretty positive
    and people are putting some money to work."
    Short covering and program buying were a factor buoying
    stocks Tuesday, said Andre J. Bakhos, president of Princeton
    Financial Group.
    Short-covering is the buying back of a share which was
    previously sold to close out a short position. Short-sellers
    borrow shares, then sell them, waiting for the stock to fall so
    they can buy the shares at the lower price, return them to the
    lender and pocket the difference. Program buying is the
    automated buying of blocks of shares according to predetermined
    parameters, such as price and time of day.
    The gains also reflected "the expectation that earnings may
    not be as sour as people have been speculating," Bakhos said.
    Among other banks reporting earnings, Wells Fargo & Co.,
    U.S. Bancorp and National City Corp. all gained after posting
    increased profits. Wells Fargo rose 1.3 percent, or 77 cents to
    $61.46, U.S. Bancorp gained 2.8 percent, or 84 cents to $31.03,
    and National City gained 3.3 percent, or $1.15 to $36.37.
    But Dow component 3M Co., the maker of Scotch tape and
    Post-It notes, fell 2.3 percent, or $1.95 to $81.02 after the
    performance of its display and graphics unit was weaker than
    some analysts expected.
    In other news, shares in May Department Stores Co. shot
    higher as the resignation of its chief executive prompted
    analyst upgrades -- and some bid speculation -- on hopes of a
    turnaround for the company. The stock rose 16 percent, or $4.37
    to $32.21.
    Krispy Kreme Doughnuts Inc. shares climbed 10 percent, or
    89 cents to $9.61. The doughnut chain, which is facing a
    federal accounting probe, replaced its CEO, Scott Livengood.
    Electronic Arts Inc. shares climbed 2 percent, or 97 cents
    to $60.81, after the video game publisher announced a 15-year
    licensing deal with sports broadcaster ESPN Monday.
    Oil companies were given a boost by Morgan Stanley raising
    its fourth quarter estimates for integrated oils -- ones which
    explore, drill and refine -- citing stronger-than-expected oil
    and gas prices. It named ConocoPhillips, Marathon Oil Corp.,
    and Exxon Mobil Corp. as its favorite integrated oil stocks.
    Conoco rose 1.2 percent, or $1.10 to $90.12, Marathon edged up
    46 cents, or 1.2 percent, to $38.76 and Exxon nudged up 43
    cents to $51.50.
    In economic news, net inflows of capital into U.S. assets
    surged to an unexpectedly high $81 billion in November,
    according to a Treasury Department report on Tuesday. That gave
    a small boost to the dollar which was up against the yen and
    the euro -- generally a positive for equities as it helps
    investment in U.S. assets.
    However, activity at New York state factories fell in early
    January, although manufacturing conditions remain favorable, a
    survey by the Federal Reserve Bank of New York said.

 
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