May 19, 2024

Wall Street Indexes Try to Find Their Footing

Caterpillar , the Chevron Corporation and Merck Company each beat earnings forecasts for the first-quarter. Merck, the pharmaceutical giant, said its profit more than tripled because of much lower restructuring and merger costs.

Caterpillar, the world’s largest maker of mining and construction equipment, rose 2.25 percent in early trading after the company said its earnings rose more than fivefold. The company also raised its sales and profit outlook for the year. Caterpillar is closely watched on Wall Street as a sign of the health of the global economy. Its shares were 1.9 percent while Merck rose 1 percent.

The Goodyear Tire and Rubber Company rose 14.1 percent, the most of any company in the Standard Poor’s 500 index, after it set a company sales record and reversed its loss from the first quarter of last year.

Shares of the home builder D. R. Horton rose 2.4 percent after it reported a surprisingly strong profit. The company said its fiscal second-quarter profit more than doubled mostly because of a large tax benefit. Its shares were 3.1 percent higher.

Shares of Chevron rose1.7 percent after the company said its net income rose 36 percent, its best quarter since 2008.

In economic news, the government said that consumers spent more in March. But that was because they paid more to buy food or fill up their cars with gas. Their incomes also increased, though, as a result of a cut of 2 percentage points in Social Security taxes

In afternoon trading, the Dow Jones industrial average was up 63.65 points, or 0.5 percent. The broader Standard Poor’s 500-stock index was 3.17 points or 0.23 percent higher. The technology heavy Nasdaq were flat.

Shares of Microsoft, the software maker, dropped 4 percent after it reported that revenues from its Windows operating system fell 4 percent from the same time last year.Despite the soft trading on Friday, all three major indexes are substantially higher for the week. The Dow has gained more than 2 percent, while both the S.P. and the Nasdaq have added about 1.6 percent.

Bond prices are falling, sending yields higher. The yield on the 10-year Treasury note fell to 3.31 percent from 3.32 percent late Thursday.

In Europe, the CAC 40 in Paris was flat, while the DAX in Frankfurt was up 0.4 percent. The FTSE 100 in London was closed as the country celebrated the nuptials of Prince William and Kate Middleton.

Economic reports from Europe were downbeat. Inflation in the 17 euro countries crept up to 2.8 percent in April, official data showed, keeping the pressure on the European Central Bank to raise interest rates again later this year.

That has aroused concerns that higher borrowing costs may make it harder for financially troubled countries like Greece, Ireland and Portugal to return to growth and manage their debt.

Other signs for the euro zone remained mixed. Unemployment was steady at 9.9 percent in March, although Spain’s rate rose sharply to a new euro zone record of 21.3 percent in the first quarter.

Nearly 5 million people are out of work now in Spain, the government said, adding pressure on the country as it tries to recover from nearly two years of recession and convince investors that it can handle its own debt load.

Two of Europe’s leading industrial companies reported hefty growth in first-quarter earnings. The German carmaker Daimler AG said net profit nearly doubled as its luxury Mercedes brand kept up its strong sales performance in China.

Total, Europe’s third largest oil producer, said its profit grew 50 percent in the first quarter thanks to sharply higher oil prices.

Meanwhile in Asia, equity markets also reacted nervously to the weak economic data in the United States. American demand for Asian exports may actually slow, said Dariusz Kowalczuk of Crédit Agricole in Hong Kong.

Hong Kong’s Hang Seng index closed down 0.4 percent to 23,805.63, with renminbi units of Hui Xian Real Estate Investment Trust falling 9.4 percent in their trading debut. They are the first equity securities denominated in China’s currency to trade outside of mainland China.

Japan’s Nikkei 225 was closed for the start of Golden Week holiday.

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