Business briefs, May 4, 2007
May 3, 2007 at 9:21 AM
Stocks rise; S&P 500 closes above 1,500
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NEW YORK - Wall Street extended its advance Thursday amid a burst of enthusiasm about the economy that gave the Standard & Poor's 500 index its first close above 1,500 since September 2000. The S&P 500, the index most closely watched by market professionals, made its first foray past 1,500 shortly after trading began and rose as high as 1,503.34 just over a week after the Dow Jones industrial average passed 13,000 for the first time. The index closed at 1,502.39, up 6.47, or 0.43 percent, and is now within striking distance of its closing high of 1,527.46, set March 24, 2000, just as the dot-com bubble began to burst and Wall Street began a three-year-long decline. The Dow, meanwhile, had its third straight record high close. Stocks have soared in recent weeks as first-quarter earnings beat reduced expectations, and upbeat economic news added to the gains. With the Dow having piled on more than 700 points in April alone, there are concerns that investors may be getting a little too enthusiastic given the uncertainty in the housing market and other sectors of the economy. On Thursday, the good news was about inflation: The Labor Department said wages, as measured by unit labor costs, rose at a tepid 0.6 percent rate in the first quarter. The news fed Wall Street's hopes for an interest rate cut later this year. Perhaps giving the S&P 500 its final push, the Institute for Supply Management said its index of non-manufacturing business rose to 56.0 in April from 52.4. "You're seeing some vertigo out there, the fear we're getting ahead of ourselves," said Arthur Hogan, chief market analyst at Jefferies & Co. "There's going to be natural trepidation at new levels, but you rationalize these levels in knowing that we haven't overextended ourselves like we were in 1999." The Dow Jones rose 29.50, or 0.22 percent, to 13,241.38. The blue chip index has now hit 18 record closes since the start of the year and 40 since the beginning of October. The Dow's climb in 22 of the past 25 sessions marks the blue chip average's longest advance since 1955. The Nasdaq composite index rose 7.62, or 0.30 percent, to 2,565.46. The S&P's achievement marked another milestone in Wall Street's recovery from a prolonged slump at the start of the decade. The slide began with the end of the dot-com boom, then accelerated as the economy fell into recession and after the Sept. 11, 2001, terror attacks. Corporate scandals including the collapse of Enron Corp. and Worldcom took a further toll on the market. The S&P 500 fell to a low of 776.76 on Oct. 9, 2002, before starting its recovery. But while it and the Dow have made the long trip back, the Nasdaq, despite its own signs of vigor, is not expected to reach its closing high of 5,048.62, set March 24, 2000, anytime soon. The tech-dominated index was arguably overinflated by the rush to join the Internet boom. "People are watching the momentum moving the market higher and in some cases they're participating, maybe grudgingly, but they're missing out otherwise," said Bill Schultz, chief investment officer, at McQueen, Ball & Associates. "There are a lot of people that are looking for a dip to buy and we haven't seen it. At some point you have to say, â€˜The dip isn't coming but I want to participate.'" Thursday's advance came as investors grew optimistic about inflation. Although Wall Street has surged higher over the past month, concerns about inflation, including that of wages, still dog the market as investors try to determine whether an inflation-wary Federal Reserve will become comfortable enough later in the year to lower short-term interest rates. The Fed has left rates unchanged at recent meetings, in part because of concerns about inflation. Other economic data helped shape investor sentiment Thursday. The government reported that the number of Americans seeking unemployment benefits fell by 21,000 last week to 305,000, the lowest level since mid-January. The decline was broader than expected and was the third straight decrease in weekly claims. The economic figures came a day ahead of other Labor Department reports on nonfarm payrolls and unemployment. Besides economic data, the parade of earnings reports continued Thursday with General Motors Corp. turning in lower first-quarter earnings. GM's profit fell 90 percent from a year earlier, which benefited from a gain. The company also suffered losses in the residential mortgage business of GMAC Financial Services. GM, one of the 30 stocks that makes up the Dow industrials, fell $1.75, or 5.4 percent, to $30.69. Bonds fell Thursday following the economic data; the yield on the benchmark 10-year Treasury note rose to 4.67 percent from 4.65 percent late Thursday. Light, sweet crude fell 49 cents to $63.19 per barrel on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell. Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange, where consolidated volume came to 2.89 billion shares, down from 3.14 billion Wednesday. The Russell 2000 index of smaller companies rose 0.41, or 0.05 percent, to 828.87.
Eastman stockholders hold annual meeting
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KINGSPORT - Eastman Chemical Co. stockholders re-elected directors Renee J. Hornbaker, Thomas H. McLain and Peter M. Wood to three-year terms at the company's annual meeting Thursday. Stockholders also ratified the appointment of PricewaterhouseCoopers LLP as independent auditors for Eastman for 2007. In other business, stockholders approved a proposed 2007 Omnibus Long-Term Compensation Plan and rejected a stockholder proposal that would have recommended that the board establish a policy limiting benefits under supplemental executive retirement plans. Also on Thursday, Eastman's board of directors declared a quarterly cash dividend of 44 cents per share on the company's common stock, payable July 2 to stockholders of record as of June 15. Eastman is headquartered in Kingsport.
Knoxville ASQ sets training workshops
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KNOXVILLE - The Knoxville section of the American Society for Quality has scheduled two training workshops. Internal quality system auditor training will be held from 8 a.m. to 5 p.m. May 16 and 17 at Rothchild Catering, 8807 Kingston Pike, in Ten Mile Center. The course provides attendees with understanding and experience with the principles and practices necessary for performing internal audits of a quality management system. The QMS standard used will be ISO 9001:2000. The steps of planning, conducting, reporting and closing audits will be covered through discussion, case studies and live audit. The cost is $350 per person. Also, the Knoxville ASQ section will sponsor training in root cause analysis from 8 a.m. to 5 p.m. May 14 and 15 at Rothchild Catering. Topics will include the difference between problem solving and root cause analysis, some common problem-solving models and their weaknesses, five steps for performing root cause analysis, and critical tools for performing root cause analysis. The cost is $350 per person. For more information on either course, contact Sherman Meade at (865) 453-7177.
Spherion wins Small Business Award
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JOHNSON CITY - Trahan Staffing Resources Inc., doing business as Spherion in Johnson City, has received the U.S. Chamber of Commerce Blue Ribbon Small Business Award. The award was given in recognition for the company's dedication to excellence, according to a news release from the chamber. Criteria include financial performance and business history, staff training and motivation, community involvement, customers service, and business planning. Tom Donohue, chamber president and chief executive officer, said small businesses provide "more than 99 percent of all employers, creating three-fourths of all new jobs and accounting for more than one-half of the nation's gross domestic product." Winners of the award from around the country will be honored at America's Small Business Summit 2007. Also winning an award in East Tennessee was North American Credit Services in Chattanooga.