Stocks managed a moderate gain Wednesday as investors focused on solid quarterly earnings and a falling U.S. trade deficit, while shrugging off higher oil prices and a drop in petroleum reserves.
The Dow Jones Industrial Average rose 43.50, or 0.4 percent, to settle at 10,557.39. The Standard & Poor's 500 Index edged up 1.08, or 0.1 percent, to 1,223.29. The Nasdaq Composite Index rose 0.96, or 0.04 percent, to 2,144.11.
As the earnings season got underway, companies reporting better-than-expected results included Abbott Laboratories Inc. and motorcycle maker Harley-Davidson Inc. Also, newspaper publisher Gannett Co. Inc. and regional banking company BB & T; Corp. met analysts' expectations.
The Commerce Department reported that America's trade deficit fell by 2.7 percent in May to $55.3 billion, the best showing since March. The bulk of the improvement came from a big drop in oil prices which pushed petroleum imports down by 6.8 percent.
All of the good news made investors push aside rising oil prices. Light sweet crude futures for August delivery settled at $60.01 a barrel on the New York Mercantile Exchange. In its weekly supply report, the Energy Department said crude oil inventories fell by 3.9 million barrels to 321 million barrels, or 6 percent above year-ago levels. Gasoline stocks declined by 2.7 million barrels to 212.6 million barrels.
Among local companies, shares of California Pizza Kitchen Inc. rose 15.4 percent to $31.94 on good vibes from stock upgrades one day after the casual dining restaurant chain raised its earnings forecast for the second quarter. In response to the raised guidance, released late Tuesday, the L.A.-based company's stock rating was upgraded to "sector perform" from "sector underperform" by John S. Glass at CIBC World Markets; to "buy" from "hold" by Barry M. Stouffer at BB & T; Capital Markets; and to "outperform" from "sector perform" by David A. Geraty at RBC Capital Markets.
And Health Net Inc. gained 1.8 percent to $39.56 after the Woodland Hills-based managed health care company's stock was raised to "outperform" from "in-line" by analyst Matthew Borsch at Goldman, Sachs & Co.
On the down side, shares of CB Richard Ellis Group Inc. fell 4.1 percent to $43.58 after the L.A.-based real estate company's stock was downgraded to "neutral" from "outperform" by analyst Joshua Rosen at Credit Suisse First Boston. The 12-month price target was set at $46 per share.
And THQ Inc. lost 1.5 percent to $33.10 after the Calabasas Hills-based video game publisher's stock was cut to "underperform" from "neutral" by analyst Jeffrey S. Thomison at Hilliard Lyons.
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