Verizon’s earnings buoy market


NEW YORK (AP) – Solid earnings from Verizon Communications Inc. lifted stocks Tuesday, sending the Dow Jones industrial average to its best close in six years even as oil prices neared an all-time high.

Blue chip Verizon helped the Dow to its gains after saying its profit before special items topped Wall Street estimates.

The Dow rose 73.16, or 0.64 percent, to 11,416.45, its best close since finishing at 11,489.59 on Jan. 19, 2000. The Dow is 2.6 percent off a record high of 11,722.98 from Jan. 14, 2000.

There were no new economic reports. On Monday, data on consumer spending and industrial activity showed the economy is expanding at a healthy pace.

, but comments from Federal Reserve Chairman Ben Bernanke reignited interest rate concerns and triggered a late-day selloff.

With the Fed saying it could be near the end of its rate tightening, investors have become sensitive to any inflation signs that might lead to further increases in short-term lending rates. Record energy and metals prices have some analysts questioning whether the central bank has done enough to stem inflation.

“After all of these increases, we’re really at a point of watchfulness to see if the rate hikes have been sufficient or too much,” said Susan Malley, chief investment officer of Malley Associates Capital Management. “There are fears in both directions.”

Broader stock indicators also advanced. The Standard & Poor’s 500 index gained 8.02, or 0.61 percent, to 1,313.21, and the Nasdaq composite index added 5.05, or 0.22 percent, to 2,309.84.

Crude futures rose 91 cents to settle at $74.61 a barrel – oil reached a record $75.17 per barrel in late April – on the New York Mercantile Exchange as traders worried that tension over Iran’s nuclear weapons program could lead to a supply cutoff from the key exporter.

Bonds recovered somewhat from a steep selloff the day before, with the yield on the 10-year Treasury note down to 5.11 percent from 5.14 percent late Monday. The U.S. dollar fluctuated against other major currencies, and gold prices reached $670 an ounce.

Without any news on inflation or interest rates to consider, the latest batch of earnings reports gave investors more confidence about the strength of corporate profits and lent support to the market’s advance, said Brian Gendreau, investment strategist for ING Investment Management.

“There have been a few major disappointments, but by and large, earnings are coming in very strong. More than two-thirds of companies are reporting higher than expected,” Gendreau said. “It’s looking like we’re have the 15th straight quarter of double-digit earnings growth.”

Verizon’s adjusted earnings beat expectations by a penny a share. Verizon rose 38 cents to $33.17.

Sirius said its loss more than doubled last quarter, due mostly to the payment of $225 million in stock-related compensation. However, the loss was less than analysts expected, lifting shares 37 cents to $4.99.

Visteon Corp. jumped $1.18 to $7.04 after the auto parts supplier’s restructuring plan and growing worldwide business helped it swing a profit last quarter.

Honda Motor Co. gained $1.30 to $36.99 and Toyota Motor Corp. rose $3.65 to $121.03 on solid April car sales reports. Although General Motors Corp. saw its monthly volume slide 7.4 percent, its shares nonetheless rose 57 cents to $23.21.

Hovnanian Enterprises Inc. plunged $2 to $36.78 after the homebuilder said late Monday its second-quarter results would be less than earlier forecasts because of slowing sales and production delays.

Advancing issues led decliners by 5 to 3 on the New York Stock Exchange, where volume of 1.73 billion shares lagged the 1.74 billion shares that changed hands on Monday.

The Russell 2000 index of smaller companies rose 6.49, or 0.85 percent, to 767.61.

Overseas, Japan’s Nikkei stock average jumped 1.24 percent. Britain’s FTSE 100 added 0.98 percent, Germany’s DAX index gained 0.69 percent and France’s CAC-40 was higher by 1.02 percent.

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AP-ES-05-02-06 1703EDT