MarketWatch: US Stocks rise again

25 March 2011 - MarketWatch  - Brendan Conway 

U.S. stocks advanced, boosted by corporate earnings and data showing the U.S. economy picked up some speed at the end of 2010.

The Dow Jones Industrial Average moved into positive territory for the month and was up 59 points, or 0.5%, at 12229 recently, led by Dupont, which gained 1.5%, and AT&T, which rose 1.2%. The Standard & Poor's 500 gained seven points to 1316, with materials stocks in the lead. The Nasdaq Composite added 20 points to 2756.

Encouraging earnings reports from Oracle and Accenture late Thursday helped set Friday's tone. Oracle added 3.5% after the business software company's fiscal third-quarter profit soared 78%, with strong margins and a surge in licensing revenue. Accenture added 6.2% after the company raised its revenue outlook and reported a 26% jump in fiscal second-quarter earnings, highlighted by a surge in new bookings.

A positive reading on the U.S. gross domestic product also gave a boost. GDP, the value of all the goods and services produced in the economy, rose at an inflation-adjusted annual rate of 3.1% in the fourth quarter. The growth was slightly better than previously thought.

The Dow was on track for its sixth gain in seven sessions. Some investors questioned whether the market would be able to sustain the sudden strength it has shown over the last week.

"We don't think there's anything imminent or dire occurring, but I do think the market is a little ahead of itself," Harry Rady, chief executive officer of Rady Asset Management in San Diego said, adding that his company is lightening up its portfolio into the weekend.

He noted the Chicago Board Options Exchange Volatility Index, or VIX, a measure of investors' outlook for market gyrations, has fallen for seven straight sessions and could easily snap back with negative news. "It's too much too fast, and it overshot the market," Rady said, noting that investors' volatility expectations could snap right back with a setback in Japan or some other global trouble spot.

Investors largely shrugged off a disappointing University of Michigan consumer sentiment reading. The figure came in beneath economists' expectations at 67.5, a reminder that consumer sentiment remains weak.

The price of crude oil was a fraction lower at $105 a barrel.

Demand for U.S. Treasurys was slightly lower, with yield on the 10-year note at 3.44%.

The dollar rose slightly against both the euro and yen.

Among stocks in focus, mobile-device maker Research In Motion's stock plunged 11% after the company warned of lower earnings and revenue in the current period. RIMM also said it planned to allow Android applications to run on its PlayBook tablet computer due out next month, viewed as a concession as the company struggles to compete against Apple's iPad.

Retailer Wet Seal's core profit for the fiscal fourth quarter rose above guidance, helping shares rise 12%.

Wynn Resorts gained 2.7% after it said Thursday it had formed a strategic relationship with one of the largest poker sites operating in the U.S., even though the federal government considers such activity illegal.

Darden Restaurants' fiscal third-quarter earnings rose 13% to beat its own optimistic guidance, but a promotional misfire at casual-dining chain Olive Garden helped push shares 3.9% lower.

Lo-Jack slid 8.1% after J.P. Morgan analysts cut their investment rating on the shares to "neutral" from "overweight," citing higher legal costs and slower licensing revenue associated with a licensee in Brazil.

Body Central surged 20% after the apparel company's fourth-quarter earnings leapt 86% and the company gave an upbeat outlook

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