June 18, 2024

S.&P. Closes at Highest Level Since June 2008

Better-than-expected earnings reports from companies ranging from airlines to office products manufacturers helped drive a broad stock market rally that included all 10 company groups that make up the Standard Poor’s index. Industrial companies gained nearly 2 percent, the most of any group.

The Ford Motor Company reported its best first-quarter earnings since 1998. The carmaker topped Wall Street’s earnings estimates with stronger sales of new vehicles. Ford shares rose 0.77 percent.

The 3M Company, which makes Post-Its and Scotch Tape, said quarterly profit jumped 16 percent from a year ago, also topping analysts’ estimates. 3M raised its full-year earnings expectations despite taking a hit from the earthquake in Japan. Its share rose 1.9 percent.

Delta Air Lines said rising fuel prices played a large role in pushing its quarterly loss to 38 cents a share. Analysts expected worse. Delta shares jumped 11 percent.

The engine maker Cummins gained 7.6 percent after it said that it was raising its profit forecast for the year because of strong demand.

Shares of United Parcel Service rose 0.9 percent after it also raised its earnings estimate for the year after its quarterly results topped analysts’ expectations.

Coca-Cola’s stock fell 1.2 percent after its earnings per share fell a penny short of Wall Street’s expectations. First-quarter net income rose 18 percent as sales overseas gained strength.

The latest report on home prices, the Standard Poor’s Case-Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than forecasts for a drop of 0.3 percent. Prices in the 20 cities have fallen 3.3 percent from February a year ago.

At the close, the Dow Jones industrial average was up 115.49 points, or 0.93 percent, at 12,595.37, while the broader Standard Poor’s 500-stock index added 11.99 points, or 0.9 percent, to close at 1,347.24. The technology heavy Nasdaq gained 21.66 points, or 0.77 percent to 2,847.54.

The Dow is up 8.8 percent for the year, while the S.P. and the Nasdaq are up more than 7 percent.

Stocks also got a lift from a report on consumer confidence. The Conference Board said its confidence index rose in April after falling in March. The index is based on the board’s survey, which showed that worries about rising prices and unemployment eased. Among the encouraging signs, those who said jobs are “hard to get” dropped, while those who expected higher incomes rose.

The market’s continued rebound is crucial to luring nervous Americans back into investing in stocks, said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Va.

Mr. Gayle says he talks to a lot of retail investors who were burned when markets dropped in 2000 and 2008 and remain wary of putting their savings into stocks.

“The stock market in the last 10 years has disappointed a lot of investors,” he said. “There are some lasting scars there.”

The Federal Reserve begins a two-day meeting on Tuesday. Economists expect the Fed will leave short-term interest rates unchanged and end its $600 billion bond-buying program in June as scheduled. The bond-buying effort has been credited with lifting financial markets since the Fed chairman, Ben S. Bernanke, first hinted of it last August.

Indexes in Europe closed higher as traders returned from the Easter holiday and shrugged off the latest bad budget news from crisis-stricken Greece.

After being closed since Thursday, the Dax in Frankfurt rose 0.84 percent. The FTSE 100 index in London was up 0.85 percent, while the CAC 40 in Paris was up 0.58 percent. Asian shares fell on disappointing quarterly earnings in the United States.

Greece’s struggle with its heavy debt burden produced more downbeat news, with the European statistics agency Eurostat saying the country’s budget deficit rose last year to 10.5 percent of G.D.P., above the forecast 9.6 percent.

A sharper revision of Greece’s budget deficit had started Europe’s debt crisis in late 2009, but this one was largely reported ahead of time in news media and priced in by the markets. The country has been bailed out by the European Union and the International Monetary Fund and is still struggling to avoid having to restructure its debts.

Analysts at Crédit Agricole said this revision’s impact was lessened by improvements in Greece’s formerly lax statistics keeping and by the announcement of more cutbacks to address the increased deficit.

“On the bright side, now that Eurostat and I.M.F. experts have labeled Greece’s public finances data as more reliable, one could expect this revision to be the last of a long series, and the Greek government already announced additional austerity measures to offset the corresponding fiscal shortfall,” they said.

In Asia, mixed American corporate earnings sent Asian stocks lower as traders waited for the Fed’s updated outlook on the world’s biggest economy.

Japan’s Nikkei 225 index closed down 1.2 percent, to 9,558.69 , with investors unloading blue chip shares ahead of what is expected to be a punishing earnings season. Nintendo announced Monday that its annual profit dropped for the second consecutive year as sales of its gaming devices fell.

Benchmark crude for June delivery was down 24 cents, to $112.04 a barrel in New York trading.

Article source: http://www.nytimes.com/2011/04/27/business/27markets.html?partner=rss&emc=rss

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