US stocks: Markets gain, as blue chips lead way

NEW YORK - US stocks rose today, led by gains in blue chips, as General Motors Corp. rose on expectations the company can maintain its market share and Boeing Co. surged after China placed a large order for new planes.

Circuit City Stores Inc., the No. 2 US electronics chain, posted a quarterly profit that beat Wall Street's forecasts. Some investors took it as a sign that more corporate earnings reports will be strong and consumer spending is still healthy.

Gains in the broad market were limited as investors remain concerned that high energy prices and benchmark interest rates near 5 per cent will hurt economic growth, analysts said.

"So far we've had pretty strong earnings reports, and of course, that helps," said Liz Ann Sonders, chief investment strategist at Charles Schwab.

"But the reason why we are not seeing investors more enthusiastic about stocks is that oil is once again near US$70 and interest rates are on the rise."

The Dow Jones industrial average rose 40.34 points, or 0.36 per cent, to end at 11,129.97. The Standard & Poor's 500 Index gained 1.55 points, or 0.12 per cent, to finish at 1,288.12. The Nasdaq Composite Index advanced 4.33 points, or 0.19 per cent, to close at 2,314.68.

GM shares gained 4.2 per cent, or 81 cents, to US$20.03 after the automaker's head of products development, Bob Lutz, said General Motors could sustain market share in the low- to mid-20 per cent range over time.

Boeing shares rose to a record high after China placed an order for 80 Boeing 737 planes with a list value of US$4.6 billion. Morgan Stanley raised its price target on Boeing, MarketWatch reported on its website. The stock was up 3.3 per cent, or US$2.64, at US$83.21 on the NYSE, after earlier climbing to a record of US$84.22.

Energy companies' shares were the biggest drag on the S&P 500, following a retreat in oil prices. Chevron Corp. fell 1.3 per cent, or 79 cents, to US$58.67, and Exxon Mobil Corp. slid 0.9 per cent, or 54 cents, to US$61.46 on the New York Stock Exchange.

Stocks started strong, but pared gains at mid-morning as weekly government data showed a larger-than-expected drop in US petrol inventories that drove crude oil prices higher. But crude later pulled back.

On the New York Mercantile Exchange, crude for May delivery fell 36 cents to settle at US$68.62 a barrel -- down from a session high of US$69.60.

Circuit City said profit jumped 65 per cent on strong sales of flat-panel televisions and fewer price cuts. Its shares shot up 8.3 per cent, or US$2.04, to US$26.65.

Also on the earnings front, Advanced Micro Devices Inc. reported after the bell on Wednesday a quarterly profit, after a year-ago loss.

Shares of AMD rose 1.6 per cent in after-hours trading to US$36 on the Inet electronic brokerage. The stock closed at US$35.42, up 3.1 per cent, or US$1.07, on the NYSE.

During the regular session, shares of Bausch & Lomb Inc.fell 7 per cent, or US$3.42, to US$45.61 after several major retailers began to take its contact lens products off shelves due to health concerns.

Trading was moderate on the New York Stock Exchange, with about 1.40 billion shares changing hands, below last year's daily average of 1.61 billion. On Nasdaq, about 1.57 billion shares were traded, below last year's daily average of 1.80 billion.

On the NYSE, advancers outpaced decliners by a ratio of about 7 to 6. On the Nasdaq, about five stocks rose for every four that fell.

- REUTERS