U.S. stocks rose yesterday amid optimism that corporate profits will meet or exceed expectations in 2004 after growing this year at the fastest rate since 1999.
Trading on the New York Stock Exchange was the lightest in five years in a holiday-shortened session.
Canadian markets were closed for the Boxing Day holiday.
Retailers led the gains in the United States as sales reports from Sharper Image Corp., a seller of items such as Ionic Breeze air purifiers, and Chico's FAS Inc., a women's clothing chain, showed stores benefited from a last-minute holiday shopping surge.
U.S. Steel Corp. and Nucor Corp. advanced after China, the world's largest steel consumer, removed import tariffs on some steel products.
The Standard & Poor's 500 index rose 1.85 points or 0.2 per cent to 1,095.89. The materials index, which includes the steel makers, had the biggest jump among the benchmark's 10 industry groups. The Dow Jones industrial average gained 19.48 points or 0.2 per cent to 10,324.67. The Nasdaq composite index added 3.91 points or 0.2 per cent to 1,973.14.
Stock benchmarks have surged in 2003 as economic growth boosted corporate profits. This year, the S&P 500 has gained 25 per cent, the Dow average has added 24 per cent and the Nasdaq has risen 48 per cent.
Almost five stocks rose for every three that fell on the NYSE yesterday. Some 358 million shares changed hands on the Big Board, the lightest day since Dec. 24, 1998. U.S. stock markets were closed on Thursday for Christmas, and trading ended at 1 p.m. in New York yesterday.
Sharper Image added $2.42 to $32.39. The retailer boosted its fourth-quarter profit forecast, citing holiday sales that were helped by a surge in last-minute Christmas shoppers.
Chico's FAS, the women's clothing retailer, rose 98 cents to $35.94. The company predicted that December sales at stores open at least a year will rise 18 per cent to 21 per cent.
Other retailers also gained. RadioShack Corp., the No. 3 U.S. electronics retailer, added 62 cents to $30.56. Best Buy Co. Inc. , the top U.S. electronics retailer, increased 83 cents to $50.56.
Wal-Mart Stores Inc. increased 8 cents to $52.52. The top retailer said December sales at U.S. stores open at least a year will rise near the low end of its forecast.
S&P 500 companies trade at almost 20 times analysts' estimated annual earnings, up from 15 in March, when the index approached a five-year low.
Companies in the benchmark will boost fourth-quarter earnings by 21.9 per cent, on average, according to Thomson Financial/First Call. S&P 500 profits are expected to jump 16.8 per cent this year and 12.4 per cent in 2004.
China's removal of tariffs comes three weeks after U.S. President George W. Bush ended tariffs on steel.
The tariffs of as much as 23 per cent were imposed on some types of hot- and cold-rolled steel, stainless steel and other steel products in November last year after the United States imposed its own tariffs in March, 2002.
Nucor, the largest U.S. maker of steel made from recycled metal, gained $1.09 to $56.44. U.S. Steel, North America's largest steel maker, advanced $1.24 to $35.72.
Shares of biotechnology companies involved in livestock testing rose a second day after a cow in Washington state tested positive for mad-cow disease, also called bovine spongiform encephalopathy.
Bio-Rad Laboratories Inc. C, which makes the top-selling veterinary test for the disease, gained $2.33 to $62.15.
New York odd lots
| Odd-lot trades made Wednesday through the New York Stock Exchange: | |||
| Customer purchases | 4,499,967 | Short sales | 4,499,967 |
| Other sales | 3,986,499 | Total sales | 4,216,767 |