U.S. Stocks Open Higher After 3-day Losing Streak
NEW YORK (MarketWatch) -- Stocks opened higher Thursday, as investors keen to end a three-day losing streak found support from a report showing fourth-quarter growth was unexpectedly revised higher.
The Dow Jones Industrial Average was up 65 points at 12,366, as 29 of its 30 stocks advanced.
Among blue chips, Intel rose 0.8% after it said it would make design changes to boost microchip performance, including adopting techniques from rival Advanced Micro Devices . AMD fell 0.4%.
Citigroup rose 1% after saying it planned to roughly double its China branch network in 2007. . And Boeing Co. gained 0.7% after Colombia's largest airline, Avianca SA, said it would buy 10 of Boeing's 787 Dreamliner aircraft. .
The S&P 500 index rose 7.6 points to 1,424.00, while the Nasdaq Composite climbed 11.7 points to 2,429.10.
Stock futures extended their gains after the Commerce Department said the economy grew at a 2.5% annual pace in the final three months of 2006, slightly faster than the previous estimate of 2.2%. Economists surveyed by MarketWatch were expecting the 2.2% estimate to be unrevised.
Even if backward looking, the report proved soothing for a market which has been rocked by concerns about waning economic growth amid a stumbling housing market and a meltdown in the subprime mortgage market.
In addition, seasonally-adjusted initial claims for unemployment fell by 10,000 to 308,000 in the latest week.
On Wednesday, stocks closed sharply lower after Federal Reserve Chairman Ben Bernanke reiterated concerns about inflation, disappointing investors hoping that weaker growth would soon push the Fed closer to cutting interest rates.
"Gentle Ben is no more," said Marc Pado, market strategist at Cantor Fitzgerald, in a note. "Fighting inflation is job #1 at the Fed.," Pado said. "Housing is the biggest threat to the economy. And, the Fed's hands are tied."
Other markets
Crude-oil futures continued to climb, with crude rising 19 cents at $64.27 a barrel. But the market seemed less volatile than in previous sessions. Iran has offered to let the U.K. visit the 15 British troops captured last week, though it still called for Britain to admit they entered Iran's territorial waters.
April gold futures remained down, $2.20 to $670.70 an ounce, as the dollar strengthened following the GDP revision.
Merger news
Of companies in focus, Bell Canada owner BCE may receive the country's largest-ever takeover bid from a group led by Kohlberg Kravis Roberts, according to report in the Globe and Mail newspaper. The bid could be worth over $25 billion.
In other merger news, U.S. Steel said it was buying Lone Star Technologies for $2.1 billion, or $67.50 a share. The per-share bid represents a 39% premium to Wednesday's closing price.
Lone Star shares shot up 37% to $66.46 ahead of the open, while U.S. Steel eased 0.2% to $97.40.
RF Micro Devices may see pressure after the mobile phone parts supplier expects a sequential fall in first-quarter revenue, earnings and margins due to slower demand from an unnamed top-tier customer. Motorola recently issued a profit warning over handset sales.
Chip maker Altera may rise after a new share buyback plan was announced alongside a 4 cents a share dividend.
Payroll processing firm Paychex could also see pressure after reporting below-forecast third-quarter earnings.
Broker A.G. Edwards and retailer Family Dollar Stores also are due to report quarterly results.
By Nick Godt