Merck Company and DuPont led gains in the Dow Jones industrial average. Charles Schwab, the brokerage firm, rallied 2.1 percent as earnings and sales exceeded analysts’ estimates. Google fell 8.3 percent, the most since 2008, after earnings fell short of projections. Bank of America fell 2.4 percent as executives said profitability from lending might come under pressure.
The Standard Poor’s 500-stock index rose 5.16 points, or 0.39 percent, to 1,319.68, trimming its weekly loss to 0.6 percent. The Dow Jones industrial average rose 56.68 points, or 0.46 percent, to 12,341.83. The Nasdaq composite index was up 4.43 points, or 0.16 percent, to 2,764.65.
“The economy continues to expand and the recovery is sustaining,” said Russ Koesterich, the head of investment strategy for scientific active equities at BlackRock in San Francisco. “It’s not going to be a bad earnings season. It’s just that a lot of the good news is already baked in. It’s going to be a choppy market with an upward bias.”
Stocks turned higher after the Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 69.6, higher than forecast, from March’s 67.5 reading, which was the lowest since November 2009. The gauge was projected to rise to 68.8, according to the median forecast of 66 economists surveyed by Bloomberg News.
Manufacturing in the New York region expanded in April at the fastest rate in a year. The Federal Reserve Bank of New York’s general economic index rose to 21.7 from 17.5 in March. Economists projected 17, based on the median forecast in a Bloomberg News survey.
A separate report showed industrial production increased more than forecast in March, led by a rebound in consumer goods manufacturing. Output rose 0.8 percent, the fifth straight gain, the Federal Reserve said.
Merck gained 1.9 percent, to $34.51. The company will split sales for the arthritis drug Remicade with Johnson Johnson, ending an arbitration dispute that helped drive Merck shares down over the last year.
Charles Schwab advanced 39 cents, to $18.61. The brokerage firm beat estimates, helped by interest revenue and higher fees for managing assets.
Google slumped $47.81, to $530.70. A first-quarter hiring binge and increased marketing led to the biggest jump in operating expenses in three years.
Bank of America fell 31 cents, to $12.82. ’The company reported first-quarter profit excluding some items of 17 cents a share, missing the average analyst estimate by 35 percent.
Higher oil prices and supply disruptions from Japan’s March 11 earthquake prompted Thomas Lee, an equity strategist at JPMorgan Chase, to cut his 2011 profit estimate for the S. P. 500.
Alan M. Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Va., said: “The market is unforgiving. Investors have raised their expectations on what constitutes good corporate performance. Yes, the economy is growing. The question is, What is going to convince the market to break into new highs? So far earnings have not been too inspiring.”
Interest rates were lower. The Treasury’s benchmark 10-year note rose 24/32, to 101 25/32, and the yield fell to 3.41 percent from 3.50 percent late Thursday.
Article source: http://feeds.nytimes.com/click.phdo?i=db332f9ddffc8b0c01b9e7d35977e76e
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