Stocks Advance on Earnings, Job Market

U.S. stocks rose Thursday in another late-day rally as enthusiasm about strong earnings tempered nervousness about more weakness in credit conditions with news another mortgage lender may fold.

The Dow Jones industrial average gained 100.96 points, or 0.76 percent, to end at 13,463.33. The Standard & Poor's 500 Index rose 6.39 points, or 0.44 percent, to 1,472.20. The Nasdaq Composite Index gained 22.82 points, or 0.89 percent, to 2,575.98.

Pharmacy chain CVS Caremark Corp. (CVS) and MTV networks owner Viacom Inc. (VIA) were among companies that posted results that topped Wall Street's expectations, sending their shares higher. CVS shares climbed 3.5 percent.

Stocks surged late in the session, echoing the previous day's last-minute rally. Bets the market would drop were reversed after stocks shook off further evidence of a deteriorating lending environment.

Among those signs was Accredited Home Lenders Holding Co. (LEND) — a subprime lender in the process of being sold — which raised concern about its ability to stay in business. Its shares plunged 35.3 percent to $5.31 on the Nasdaq.

"Volatility has definitely increased. We had a downward revaluation of equities fairly swiftly and now the market is settling in and trying to find a level that people are comfortable with," said Eric Kuby, chief investment officer at North Star Investment Management Corp., in Chicago.

"There is an overall sense of unease, which is being offset by, generally speaking, good earnings."

The market has been struggling to shake off worries that worsening credit conditions could hurt the economy. Credit concerns pushed the S&P 500 down in July to its worst monthly performance in three years.

More bad news came from bond insurer MBIA, which said delinquencies are rising among some subprime home loans serviced by Countrywide Financial Corp., the largest U.S. mortgage lender. Shares of Countrywide fell 1.6 percent to $26.77 on the New York Stock Exchange.

News that electronic payment company CheckFree Corp. is being bought for $4.4 billion in cash helped lift the Nasdaq. CheckFree shares jumped 23.3 percent to $45.40.

Hewlett-Packard Co.'s (HPQ) stock rose 3.2 percent to $48.23 after UBS raised its price target on the computer and printer maker and kept its "buy" rating. Banc of America Securities on Wednesday started coverage of Hewlett-Packard with a "buy" rating and a $56 price target.

Shares of Viacom, owner of MTV Networks, Paramount movie studios and Nickelodeon cable channels, rose 1 percent to $38.39, while CVS' shares gained 3.5 percent to $36.79, both on the NYSE.

News that jobless claims increased slightly less than expected last week from the previous week cheered investors. But they were less enthused about a government report showing new orders at U.S. factories rose less than expected in June.

Trading was active on the NYSE, with about 1.98 billion shares changing hands, above last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.51 billion shares traded, ahead of last year's daily average of 2.02 billion.

Rising stocks were outnumbering falling ones by a ratio of about 2 to 1 on the NYSE and by 4 to 3 on Nasdaq.