Stocks moved higher Tuesday on upbeat economic data and a continuation of positive corporate earnings growth, which helped lead the S & P; 500 and Nasdaq to four-year highs.
The Dow Jones Industrial Average rose 60.59, or 0.6 percent, to close at 10,683.74. The Nasdaq Composite Index edged up 22.77, or 1 percent, to 2,218.15, its best close since June 2001. The S & P; 500 Index climbed 8.77, or 0.7 percent, to 1,244.12, hitting a new four-year high for the sixth time since July 14.
U.S. consumer spending advanced 0.8 percent in June as shoppers took to auto showrooms to enjoy sales incentives that helped keep inflation steady. But the nation’s personal savings rate fell to 0 percent, the lowest since October 2001 And new orders at U.S. factories rose 1 percent in June as strong demand for computers and electronics outstripped weakness in transportation equipment, the Commerce Department said. The June gain matched Wall Street expectations.
Among local movers, shares of Herbalife Ltd. jumped 20.7 percent to an all-time high of $28.25 after the L.A.-based maker of nutritional products reported, late Monday, net income of $22.8 million (32 cents per diluted share), beating analysts’ estimate of 27 cents a share. The company also raised its profit outlook for the year.
And Digital Theatre Systems Inc. rose 10.7 percent to $19.74 after the Agoura Hills-based digital technology services company reported, late Monday, net income of $1.8 million (10 cents per diluted share) for the second quarter, surpassing Wall Street forecasts of 6 cents a share.
On the down side, shares of Zenith National Insurance Corp. fell 4.5 percent to $67.40 after Fairfax Financial Holdings Ltd. said some of its subsidiaries sold 2 million shares of the Woodland Hills-based property and casualty insurance company to Wachovia Securities for net proceeds of $132 million. Toronto-based Fairfax held onto about 16 percent of Zenith’s common stock.
And Image Entertainment Inc. sunk 1 percent to $3.09 after the Chatsworth-based entertainment company on late Monday lowered its first-quarter revenue forecast to between $18 million to $19 million, down from previous guidance of between $19 million to $21 million. On Tuesday, the company announced it acquired all of the outstanding capital stock of Public Media, Inc. and signed a long-term exclusive home video distribution agreement with The Criterion Collection that expires in 2010.
