September 26, 2020

Wall Street Ends Higher, Added by Upbeat Earnings

Corporate earnings have returned to prominence after a period when investors were focusing on other issues, like Japan’s earthquake and tsunami, Europe’s debt crisis and the unrest in the Arab world.

So far, the earnings reports have been generally positive. General Electric and UnitedHealth were among the large companies whose quarterly results beat analysts’ expectations Thursday morning.

Net income for G.E. was $3.4 billion in the first three months of 2011, or 31 cents a share, compared with $1.9 billion and 17 cents in the quarter a year ago. But Wall Street was expecting stronger revenue from G.E.’s industrial side and shares fell 2.2 percent.

UnitedHealth, the country’s second-largest health insurer, said its profit rose 13 percent as more employees signed up for coverage. UnitedHealth rose 7.8 percent. In the financial sector, Morgan Stanley, which like its peers is still feeling the aftereffects of the financial crisis, posted first-quarter earnings on Thursday of $736 million, down 48 percent from the period a year earlier. It also recorded a $655 million loss from a Japanese joint venture. Its shares rose 1.8 percent.

Apple reported results late Wednesday that beat estimates for both sales and profits. Apple rose 2.6 percent.

“In the past couple of days, the U.S. earnings season has enabled investors shrug off the euro woes and budget deficit concerns that dogged the early part of the week,” a senior sales trader at IG Index, Yusuf Heusen, said.

But the gains were tempered slightly by a Labor Department report that the number of people who applied for unemployment benefits fell last week to 403,000. Economists had expected a bigger drop, but applications had unexpectedly climbed to a two-month high the previous week.

At the close, the Dow Jones industrial average was 52.45 points, or 0.42 percent, higher to 12,505.99. The broader Standard Poor’s 500-stock index gained 7.02 points, or 0.53 percent, to 1,337.38. The technology heavy Nasdaq added 17.65 points, or 0.63 percent, to 2,820.16. Markets will be closed on Friday for the Easter holiday.

Better earnings from the chip maker Intel and other technology companies sent shares higher on Wednesday and drove the Dow Jones industrial average to a new 2011 high. The Nasdaq composite index gained 57 points, its biggest one-day jump in six months.

In Europe, the FTSE 100 in London was down less than 0.1 percent, while the DAX in Frankfurt rose 0.6 percent. The CAC 40 in Paris was 0.4 percent higher.

Markets have pushed higher since Monday’s retreat when investors were spooked by Standard Poor’s warning that the United States faces a one-in-three chance of having its triple-A credit rating downgraded.

“Monday is a distant memory and markets have shifted from shunning risk into the upcoming holiday period to assuming as much of it as they can,” said Robert Ryan, a foreign exchange strategist at BNP Paribas.

In the bond market, Treasury prices edged up as investors seek stable assets ahead of the long holiday weekend.

The price of the 10-year Treasury note as its yield slipped 3.39 to percent from 3.41 percent late Wednesday.

The bond market closes early Thursday and is closed Friday for the Good Friday holiday. Traders typically take cautious positions ahead of long weekends and auctions of new debt.

The Treasury will auction $35 billion in two-year notes Tuesday, $35 billion in five-year notes Wednesday and $29 billion in seven-year notes Thursday.

Earlier in Asia, Japan’s Nikkei 225 index closed up 0.8 percent, to 9,685.77 while South Korea’s Kospi index rose 1.3 percent, to 2,198.54. Hong Kong’s Hang Seng ended 1 percent higher, to 24,138.31, and mainland China’s Shanghai Composite Index rose 0.7 percent, to 3,026.67.

In the oil markets, the focus remained on the fighting in Libya. Oil prices have increased 20 percent since the beginning of the year as investors anticipated rising global demand while unrest in North Africa and the Middle East threatened oil fields and shipping lanes vital to world supply.

Benchmark crude for June delivery rose 77 cents, to $112.22 a barrel in New York trading. The contract rose $3.17 to settle at $111.45 on Wednesday.

In the currency markets, the dollar fell to a 16-month low against the euro with investors expecting the Federal Reserve to keep interest rates near zero.

Higher rates tend to support a currency’s value because they can generate a bigger return on investments denominated in that currency — lower rates make a currency less appealing. The Fed has kept its key rate near zero since December 2008, while most of the world’s other central banks are raising interest rates.

The Fed next meets to talk about interest rates and other monetary policy on Tuesday and Wednesday. The central bank is not expected to cut short the $600 billion bond-purchasing program, set to expire in June, that was designed to drive down interest rates.

In afternoon trading in New York, the euro was worth $1.4577, up from $1.4514 late Wednesday. The euro earlier rose as high as $1.4648, its strongest level since December 2009.

The British pound rose to $1.6551 from $1.6407, while the dollar fell to 81.77 Japanese yen from 82.37 yen.

Article source: http://feeds.nytimes.com/click.phdo?i=e86fd32074b685085fe2b5d9a0e6fed0

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