U.S. Stocks Rise on Earnings Reports, Europe Optimism
U.S. stocks rose, snapping a two- day decline for 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.
Stocks pared gains as Apple Inc. sank 2 percent and Bank of America Corp. tumbled 4.5 percent, dragging financial shares lower in the S&P 500. Microsoft, the world’s largest software maker, jumped 5.3 percent while GE added 1.3 percent. Schlumberger Ltd. (SLB) and E*Trade Financial Corp. (ETFC) rallied at least 3.1 percent as profits beat projections.
The S&P 500 gained 0.3 percent to 1,381.26 at 2:09 p.m. New York time, after rising as much as 0.8 percent earlier. The benchmark index for American equities is headed for a 0.7 percent weekly advance. The Dow Jones Industrial Average rose 59.18 points, or 0.5 percent, to 13,023.28 today.
“On the back of some weaker recent economic data, the earnings story continues to showcase that companies can wring out some profits here,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. “With the constant noise in the background of Europe we seem to be focusing more on the domestic story, at least today. That just gives more credence to the fact that the recovery continues to be in place.”
Profits for the 94 companies in the S&P 500 that have reported results so far are beating estimates by 8.5 percent, according to data compiled by Bloomberg. The benchmark gauge for U.S. equities has risen 9.8 percent in 2012, even after the index lost 0.6 percent yesterday as home sales fell last month and jobless claims were more than forecast last week.
A report today showed German business confidence unexpectedly increased for a sixth month in April, adding to evidence that Europe’s largest economy can weather the sovereign-debt crisis.
The Group of 20 will announce new funding for the International Monetary Fund’s European reserves that will “satisfy” requests from Managing Director Christine Lagarde, Russian Deputy Finance Minister Sergei Storchak said. Lagarde, who has called Europe the “epicenter” of risks to the world economy, is seeking more than $400 billion in new funding from member countries.
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