U.S. Stocks Rise on Earnings Reports, Europe Optimism

U.S. stocks rose, halting a two-day decline in the Standard & Poor’s 500 Index, as profits from companies including Microsoft (MSFT) Corp. and General Electric Co. (GE) beat estimates and German business confidence improved.

Equities pared gains as Apple Inc. (AAPL) slumped 2.5 percent, extending its decline since April 9 to 9.9 percent. Microsoft, the largest software maker, rallied 4.6 percent. GE jumped 1.2 percent as profit gains at the energy business outpaced finance for the first time in two years. McDonald’s Corp. (MCD) advanced 0.7 percent after reporting higher-than-estimated earnings. Bank of America Corp. (BAC) lost 4.7 percent, driving financial shares lower.

The S&P 500 increased 0.1 percent to 1,378.54 at 4 p.m. New York time, paring a gain of as much as 0.8 percent. The Dow Jones Industrial Average advanced 65.24 points, or 0.5 percent, to 13,029.34. The Nasdaq Composite Index declined 0.2 percent to 3,000.45.

“Earnings are still playing into it,” Brian Jacobsen, who helps oversee $211 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said during an interview. “In addition, the German data was encouraging. It tells us that there’s the ability in Europe to solve their debt crisis.”

Today’s rally extended this year’s gain in the S&P 500 to 9.6 percent as investors bought stocks amid better-than- estimated economic and corporate data. Earnings per share have topped forecasts at 85 percent of S&P 500 companies that reported results since April 10, according to data compiled by Bloomberg. Stocks also gained as German business confidence unexpectedly increased to a nine-month high in April.

The analysts surveyed by Bloomberg raised their first- quarter earnings estimates for S&P 500 companies this week. Per- share profits grew 3.3 percent in the first three months of the year, Bloomberg data showed. That’s up from last week’s projection for a 1.7 percent increase. Earnings per share will grow 8.8 percent during all of 2012, according to the data.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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April 20 (Bloomberg) -- Robert Breza, an analyst at RBC Capital Markets, talks about Microsoft Corp.'s fiscal third-quarter profit and the outlook for the company. He talks with Erik Schatzker, Scarlet Fu and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)