Stocks up slightly despite the weak economic reports
ASSOCIATED PRESS Signs of a sluggish economic recovery sent government bond yields to their lowest level in a year Thursday, but strong earnings and a plea to push Microsoft's chief executive officer aside helped push stocks higher.
Signs of a sluggish economic recovery sent government bond yields to their lowest level in a year Thursday, but strong earnings and a plea to push Microsoft's chief executive officer aside helped push stocks higher.
Microsoft Corp. rose 2 percent after hedge-fund manager David Einhorn called for the board to replace CEO Steve Ballmer. Einhorn was quoted as saying at a conference late Wednesday that Ballmer's management was keeping the company's stock down.
Stocks reversed early losses and bond yields remained near their lowest level in a year after two reports suggested that the U.S. jobs market was recovering more slowly than economists had anticipated.
The Dow Jones industrial average rose 8.10 points to close at 12,402.76. It was the second day of gains for the Dow after three days of losses driven by new concerns about Greece's debt crisis.
Tiffany & Co. rose more than 8 percent, the most of any stock in the S&P 500 index, after the company said its income had risen 25 percent on higher revenue in all regions. The results easily beat analysts' expectations. The jewelry maker also raised its forecast for the year above Wall Street estimates.
The Standard & Poor's 500 index rose 5.22, or 0.4 percent, to 1,325.69. The Nasdaq composite rose 21.54, or 0.8 percent, to 2,782.92.
In a revised look at economic growth, the government reported that the U.S. economy had grown 1.8 percent in the January-March quarter. Economists had expected an upward revision to 2.2 percent. Gasoline prices that reached $4 a gallon and sharp cutbacks in government spending hindered growth.
More people applied for unemployment benefits last week, the first increase in three weeks. The number rose 10,000 to 424,000. Analysts had expected a drop.
Employers stepped up hiring this spring, but some economists worry that rising applications for unemployment benefits suggest that the hiring is uneven. The next look at the job market will come Wednesday, when payroll processor ADP provides its monthly employment report.
"People are nervous about what's happening in Europe, nervous about whether or not the economic recovery has enough wind left in its sails," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds.
Concerns about the European debt crisis have caused the market to wobble in recent weeks as the likelihood that Greece will need to renegotiate its debts seemed to increase even after a package of emergency loans last year. Greece's debt troubles sent global markets reeling last spring as investors shunned the debt of other European nations. Investors are fearful that the scenario might repeat.
Stocks have been falling throughout May, erasing nearly all of the gains made in April on stronger corporate earnings reports. The S&P 500 has lost 3 percent this month after reaching a 2011 high of 1,363 on April 29. It's still up 5.4 percent for the year.
Computer Sciences Corp. fell 13 percent, the most in the S&P 500, after the government contractor reported disappointing results and a weak earnings forecast late Wednesday. CSC also announced that its audit committee had started an investigation into accounting issues, some of which the Securities and Exchange Commission is investigating.
More than two shares rose for every one that fell on the New York Stock Exchange. Trading volume was 3.5 billion shares.