Friday, March 25, 2011

Stocks headed higher Friday after the government said the economy grew at a faster pace than expected at the end of last year. Technology shares rose after business software giant Oracle Corp. posted higher earnings.

The Commerce Department said that gross domestic product rose at a 3.1 percent annual rate in the fourth quarter of 2010. That's slightly better than economists expected and higher than the estimate made last month.

Oracle rose 3.5 percent after reporting a 78 percent jump in income late Thursday. The database software maker credited new software license sales and the benefit of three full months of revenue from Sun Microsystems, a company it acquired last year.

Accenture Plc rose 6 percent. The consulting firm's quarterly earnings jumped 22 percent on stronger revenue. Both its income and revenue beat analysts' expectations.

The Dow Jones industrial average rose 82 points, or 0.7 percent, to 12,252. The Dow is now higher for the month, after falling as low as 11,613 on March 13.

The Standard & Poor's 500 index rose 9, or 0.7 percent, to 1,318. The Nasdaq composite rose 25, or 0.9 percent, to 2,761.

Investors were able to set aside a long list of worries including high oil prices, problems with Japan's nuclear reactors and fresh developments in Europe's debt crisis. Portugal looked likely to need bailout funds from the European Union after lawmakers rejected a plan to cut the country's debts and the government fell. Standard & Poor's lowered its credit rating on Portugal late Thursday.

Portugal's debt troubles aren't rattling U.S. stock investors because there's an assumption that other European countries will come to Portugal's aid, said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. "There's really this notion that governments stand ready in Europe or elsewhere to come to the rescue," he said.

There's also little incentive to shift money into the safest of investments, like bonds, Ablin said. The benchmark 10-year Treasury currently pays 3.4 percent a year. Even with a recent bout of turbulence, the Dow has gained 6 percent this year. "In the short-term, taking risk pays."

Research in Motion Ltd., the maker of the BlackBerry mobile device, fell 9.3 percent. Its profit jumped, but the company forecast earnings in the current quarter that were well below what analysts expected.

All three stock indexes are on track to post gains this week of more than 3 percent, after falling for two weeks in a row. Better economic reports and stronger earnings have helped stocks recover to levels last seen before an earthquake hit Japan on March 11.

Markets ended last week lower after getting battered by worries over Japan's ability to get its nuclear crisis under control.


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