S&P 500, Dow make history despite GM's woes

The stock market saw modest gains today but made a bit of history in the process.

The Dow Jones Industrial Average finished with its 22nd gain in 25 sessions, tying an apparent record set in June and July of 1955. If it closes with a gain tomorrow, it will match a mark from April and May of 1944, official Dow Jones records show.

The Standard & Poor's 500 Index closed above 1,500 for the first time since September 2000.

The gains came despite a 5.4% decline in shares of auto giant General Motors (GM, news, msgs), which said its quarterly profit fell 90% from a year ago. GM shares fell to $30.69 after its first-quarter results missed Wall Street's estimates. That decline cost the Dow more than 13 points and offset a 3.7% gain to $41.07 for Verizon Communications (VZ, news, msgs) that added 11.8 points to the Dow.

The Dow finished up 29.5 points to a new closing high of 13,241. At the same time, the S&P 500 gained nearly 6.5 points, 0.4%, to 1,502. The Nasdaq Composite Index was up 7.6 points, 0.3%, to 2,565. It was the Nasdaq's best close since Feb. 7, 2001.

A short history lesson for bulls and bears

The history may give bulls and bears something to cheer about.

In that 25-session Dow streak in 1955, the index gained 10% to 467. It would rise an additional 11.6% to a then-record 521 in April 1956. But big gains carry risks. After two unsuccessful attempts to move past 521, the blue-chip index fell 19% between July and October 1957.

The Dow finally blew past 521 in September 1958 as a huge bull rally drove the index up 62% by January 1960.

The S&P is now about 25 points under its all-time high of 1,527.46, set on March 24, 2000. Its last close above 1,500 was on Sept. 7, 2000.

The index hit an intraday high of 1,506 two days later, but the index and the entire stock market then fell apart, with the S&P 500 bottoming at 776.76 on Oct. 9, 2002. Since then, the S&P is up 93%. The Dow is up 81%.

Starbucks sees an 18.5% earnings gain

Shares of Starbucks (SBUX, news, msgs) were up 1.4% to $32.07 in after-hours trading after the company said new stores and increasing sales fueled an 18.5% rise in second-quarter earnings.

The company also backed its 2007 earnings forecast.

Second-quarter net income was $150.8 million, or 19 cents per share, compared with $127.3 million, or 16 cents per share, a year ago. Wall Street analysts, on average, had been expecting the Seattle coffee shop chain to earn about 19 cents per share, Reuters said. Revenue was $2.26 billion. Analysts were expecting about $2.3 billion.

Starbucks' same-store sales, which measures sales at outlets open at least a year, rose 4%. Starbucks opened 560 stores during the quarter.

Starbucks closed at $31.62, up 1.2% in regular Nasdaq trading. As of Thursday's close, the stock was down 10.9% this year, compared with a 5.9% rise in the Dow Jones U.S. restaurants and bars index, Reuters said.

Starbucks shares have been volatile over the last year, falling nearly 26% from $39.62 on May 5, 2006, to a low of $29.36 on March 13.

Verizon vote on CEO pay too close to call

Verizon shares jumped to a fresh 52-week high today as a proposal to give shareholders an advisory vote on executive pay was reported too close to call.

C. William Jones and members of the Association of BellTel Retirees had offered the proposal at today's annual meeting. In a statement afterward, Jones called the vote, regardless of the outcome, "a major moral victory for shareowners and the retirees of this company."

A preliminary tally showed 49% of shareholders were for the proposal and 49% opposed, said the group, an advocacy group for Verizon retires. It is the closest vote on CEO pay so far this proxy season.

Ivan Seidenberg, Verizon's chief executive, received a compensation package valued at $20.2 million last year.

Cowen and Co. analyst Thomas Watts attributed Verizon's stock price jump to "technical factors" and noted the company had a very good quarter.

Shareholders did approve the election of each of Verizon's 15 directors standing for election to a one-year term. They rejected a proposal to eliminate stock options, the company said.

GM earnings disappoint

General Motors shares tumbled after the auto maker reported a plunge in profit for the first quarter, partly due to big losses from the mortgage business of its GMAC Financial Services subsidiary.

GM said it earned $62 million, or 11 cents per share. That's a 90% drop from the $602 million, or $1.06 per share, it earned in the first quarter of 2006.

• Video: More on GM's dismal earnings

Excluding items related to restructuring abroad, GM's adjusted earnings were $94 million, or 17 cents per share, still well below the consensus estimate of 87 cents per share.

The company's earnings "call into question our -- and the market's -- assumption that GM would be boosted by the rollout of the GMT 900 pickups in the first half of 2007," Lehman Bros. analyst Brian Johnson wrote in a note to clients today. "Without substantial labor concessions, meaningful improvements in profitability are unlikely, in our view."

Revenue fell to $43.91 billion from $52.38 billion, but that number was ahead of the $40.88 billion analysts had been expecting.

Stocks tried to make gains by midday after another rally yesterday.

Big troubles at GMAC

Although the auto maker's numbers don't look good, this was actually the first consecutive quarterly profit for GM since 2004.

• Get free, real-time stock quotes on MSN Money

But the company's GMAC unit weighed on the company. Although GM sold a majority stake in the division to private-equity firm Cerberus Capital Management in 2006, GM still has a 49% stake in the division.

GM said today that it had been hit by a $115 million loss because of its stake in GMAC, which yesterday reported a loss of $305 million as a result of the troubled subprime, or high-risk, mortgage-lending business.

"The rest of GMAC's businesses were up year over year," GM CEO Rick Wagoner told CNBC this morning.

• Video: GM's Rick Wagoner talks about earnings

GM's North America operations posted an adjusted loss of $85 million, narrower than last year's loss of $251 million. "We continue to have a couple of areas that we need to focus on" in North America, Wagoner said, but he added that he expects to be back in the black in the near future.

Energy prices -- New York close

	Thur.	Wed.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$63.19	$63.68	-$0.49	-3.84%	3.51%
Heating oil (per gallon)	$1.8453	$1.8526	-$0.0073	-3.56%	15.48%
Natural gas (per million BTU)	$7.9470	$7.7300	$0.2170	1.07%	26.16%
Unleaded gasoline (per gallon)	$2.2476	$2.2326	$0.0150	-7.90%	40.29%

Dutch court stops ABN Amro's sale of LaSalle

It looks like the bidding war for ABN Amro (ABN, news, msgs) is about to heat up.

A Dutch court ruled today that ABN Amro must halt its $21 billion sale of LaSalle Bank in Chicago to Bank of America (BAC, news, msgs), which was part of ABN's recently announced $91 billion deal with Barclays (BCS, news, msgs). A Dutch shareholders association had complained to the court about the decision to sell LaSalle without its approval.

The ruling could cause Barclays to drop its bid for ABN or to revise its offer, The Wall Street Journal reported.

That is good news for a rival bidder consortium that includes the Royal Bank of Scotland.

And it was better news for shareholders, at least for today. ANB Amro shares were up 1.8% to $49.91 today in New York. Barclays shares were up 2.3% to $59.02. Bank of America finished up 0.4% to $51.23.

"Now that the sale of LaSalle has been deemed illegal, it is much more likely that Royal Bank will win the day," Colin Morton, a Leeds, England, fund manager at Rensburg Sheppards, told Bloomberg News. "If it had been legally sewn up, it would have been very difficult for the Royal Bank group."

The rival consortium had bid $98 billion for ABN and said last week that it had most of the financing in place.

Dow Jones says no -- sort of

For now, the board of directors at Dow Jones (DJ, news, msgs) has decided to take no action on a $5 billion bid Rupert Murdoch's News Corp. (NWS, news, msgs) made for the company Tuesday.

Dow Jones issued a statement late yesterday saying that the Bancroft family, the majority stakeholders in the company, would vote 52% of the voting shares against the deal.

But some people are still skeptical about the wording of the family's statement, which wasn't quite an outright rejection of the offer.

"You don't know if it's a true rejection or whether they're doing what any shrewd adviser would tell them to do, which is reject it to see if you can get a higher price," John Linehan, a fund manager at T. Rowe Price Group (TROW, news, msgs), told MarketWatch.

Others think a bidding war could be coming. "We're in the first inning," portfolio manager Lawrence J. Haverty Jr. at Gamco Investors told Bloomberg News. "Dow Jones is a fish in the pond, and there are sharks swimming around."

Dow Jones shares had jumped 54% since news of Murdoch's bid first was announced on Tuesday.

They were down 0.4% to $55.77 today. News Corp. shares were up slightly to $23.44.

Jobless claims fall

The Labor Department reported today that weekly jobless claims had fallen 21,000 to 305,000, the lowest level since January. Economists had been expecting a rise of 4,000 jobless claims.

"We're seeing slower job growth but at a pace that is still, at any standard, is best judged to be moderate," National City chief economist Richard DeKaser said.

• Video: Weekly jobless claims fall

Tomorrow, the Labor Department will release its report on April unemployment, and economists are forecasting a slight increase to 4.5%, up from a 4.4% reading in March.

Economists are also forecasting a 100,000 gain in nonfarm payrolls for April after a 180,000 gain in March.

U.S. productivity rose at an annual 1.7% rate in the first quarter, well above economists' estimate for a 0.8% rise. Productivity was up 1.1% year over year.

Short hits from the markets -- 4 p.m.

	Thurs.	Wed.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	4.750%	4.755%	-0.005	0.53%	-2.76%
5-year Treasury note yield	4.588%	4.548%	0.040	1.59%	-2.40%
10-year Treasury note yield	4.674%	4.646%	0.028	0.95%	-0.76%
30-year Treasury bond yield	4.837%	4.819%	0.018	0.42%	0.39%
Currencies
U.S. Dollar Index	81.82	81.59	0.23	0.58%	-1.93%
British pound in dollars	$1.988	$1.990	-0.002	-0.62%	1.45%
Dollar in British pounds	£0.503	£0.503	0.000	0.62%	-1.43%
Euro in dollars	1.356	1.359	-0.003	-0.65%	2.71%
Dollar in euros	€ 0.7376	€ 0.7358	0.002	0.66%	-2.64%
Dollar in yen	¥120.39	¥120.17	0.22	0.82%	1.15%
Commodities
Gold	$684.40	$675.10	$9.30	0.13%	7.27%
Copper	$3.7250	$3.6445	$0.08	4.74%	29.75%
Silver	$13.5100	$13.3300	$0.18	-0.48%	4.45%
Crude oil (NYMEX) (per barrel)	$63.19	$63.68	-$0.49	-3.84%	3.51%

By Charley Blaine and Elizabeth Strott