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Stocks Rise on Earnings, Deaths of Hussein's Sons

Wall Street regains its positive footing as news soothes fears that unrest in Iraq could hinder the economic recovery.

July 23, 2003|From Times Staff and Wire Reports

Stocks got a boost Tuesday from solid earnings from companies including Texas Instruments and from news that Saddam Hussein's two sons were killed in a firefight with U.S. troops in Iraq.

The market climbed out of negative territory in late morning trading on reports, later confirmed by the U.S. military, that Hussein's sons Uday and Qusay might have been killed. The news soothed fears that the persistent unrest in Iraq could hinder the fragile U.S. economic recovery.

"People were just concerned that it's costing us quite a bit in money and in lives -- a lot more than people were expecting after it was officially declared over," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Banking. "This type of news we had today doesn't put an end to it, but it lessens the perception that this thing will drag on."

The Dow Jones industrial average rose 61.76 points, or 0.7%, to 9,158.45, while the broader Standard & Poor's 500 index gained 9.31 points, or 1%, to 988.11. The technology-laced Nasdaq composite index rose 24.69 points, or 1.5%, to 1,706.10.

Winners led losers by 7 to 5 on the New York Stock Exchange and by 2 to 1 on Nasdaq as trading volume picked up from Monday's low levels.

Besides earnings and the news from Iraq, traders also pointed to the fact that the market's recent stumble was luring bargain hunters, and that the S&P 500's ability to hold above the technically significant 975 mark gave investors further confidence. "It's a combination of things: a technical bounce, decent earnings in the tech space and decent earnings in the financial sector," said David Memmott, head of listed block trading at Morgan Stanley. "You've had four out of the past five days down ... and we're just seeing a bit of a snapback."

The bond market, after a string of stormy sessions that saw the yield on the benchmark 10-year Treasury note surge more than a percentage point, stabilized a bit. The 10-year T-note yield slipped to 4.12% from Monday's close of 4.21%.

After bidding up stocks for the last four months, investors are scrutinizing companies' results and outlooks for signs that an economic upswing is firmly underway, analysts say.

Texas Instruments, the No. 1 maker of semiconductors for mobile phones, rose $1.37 to $19.25 after it reported quarterly sales and earnings that topped its lowered outlook from a month ago, helped by a recovery in wireless sales.

In other highlights:

* Semiconductor equipment stocks were among the big gainers of the day after Lehman Bros. raised its rating on a number of the sector's stocks. Applied Materials rose 89 cents to $18.76, Novellus Systems gained $1.76 to $36.31 and Lam Research added $1.05 to $21.34.

* A 5% drop in oil prices depressed the Amex index of oilfield services stocks, which fell almost 2%. BJ Services lost $1.25 to $36.89, Tidewater fell 99 cents to $26.93 and Nabors Industries slid 88 cents to $37.50.

* Newhall Land jumped $5.43 to $38.83, one day after Lennar and LNR Property agreed to buy the Southland real estate company for $40.50 a share. Lennar gained $2.04 to $68.50 and LNR rose 9 cents to $39.05.

* Eastman Kodak sank 81 cents to $24.59, its lowest price since the 1980s, after the company agreed to spend $500 million in cash to buy a maker of medical imaging systems. Some analysts said the deal could jeopardize Kodak's ability to maintain its dividend.

* Mentor rose 49 cents to $19.65. The Santa Barbara-based maker of medical implants said it would move its stock from Nasdaq to the New York Stock Exchange on Aug. 5.

Market Roundup, C6-7

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