Stocks Finish Higher

More earnings news hit Wall Street, with strong results from Boeing but a huge quarterly loss from bond insurer Ambac

Stocks rose Wednesday as traders digested a mixed bag of earnings news. After the market close, Apple (AAPL) reported strong profit and revenue for the March quarter, but gave an outlook for the current quarter that was below the Street's forecast, causing its stock to fall in after-hours trading.

At the start of the trading session, investors were disturbed by a $11.69-per-share loss for troubled bond insurer Ambac Financial Group (ABK). Net premiums written fell 38%, and credit derivative exposures added up to a $1.7 billion loss.

However, good news from Boeing (BA) and Broadcom (BRCM) helped keep stocks in positive territory. Yahoo (YHOO), United Parcel Service (UPS), Delta Air Lines (DAL) and Northwest Airlines (NWA) also posted earnings results from the first quarter.

Meanwhile, Standard & Poor's Investment Policy Committee says it "believes that from economic, fundamental, technical and historical perspectives, the worst of the recent equity price decline is likely over." The U.S. will be in recession from December 2007 to July 2008, but "the U.S. economy will begin to benefit from the spending of the tax rebate checks" early this summer, S&P says.

On Wednesday, the Dow Jones industrial average was up 42.99 points, or 0.34%, to 12,763.22. The broader S&P 500 added 4.04 points, or 0.29%, to 1,379.98. The tech-heavy Nasdaq composite index was up 28.27 points, or 1.19%, to 2,405.21.

After several days of big price gains, oil took a break early on Wednesday. But by later in the day, oil prices were higher again. On the NYMEX, June crude oil rose 23 cents to $118.30 per barrel.

Among stocks in the news, Apple said EPS for the quarter ended March 29 was $1.16, vs. 87 cents a year earlier, while revenue rose 43% to $7.51 billion. The maker of iPod and Mac computers sees EPS of $1.00 per share on revenue of $7.2 billion for the current quarter.

Boeing (BA) posted earnings of $1.62 per share, vs. $1.13 a year ago, as revenue rose 4.1%. It expects earnings of $5.70 to $5.85 per share in 2008, and $6.80 to $7 per share in 2009. The stock led the Dow index higher after rising 4.5% on Wednesday.

Broadcom (BRCM) shares jumped 16.3% after it reported earnings of 14 cents per share, vs. 10 cents a year ago, as revenue rose 15%.

Yahoo (YHOO) reported earnings of 11 cents per share, vs. 11 cents a year ago, as revenue was 8.7% higher. Microsoft (MSFT) chief executive Steve Ballmer reportedly said Yahoo's results won't be enough to raise Microsoft's $44-billion takeover offer for Yahoo.

UPS (UPS), the largest shipping company in the world, posted earnings of 87 cents per share, vs. 78 cents a year ago. That largely met investor expectations, but UPS executives warned they see no sign of an economic recovery in the U.S. in the second quarter.

Northwest Airlines (NWA) and Delta Air Lines (DAL), which plan to merge, both reported huge losses after taking a combined $10 billion writedown related to falls in the airline's market values. Delta posted a $6.39 billion loss, the equivalent of $16.15 per share. Northwest posted a loss of $4.14 billion, or $15.78 per share.

Schering-Plough (SGP) posted earnings of 15 cents per share, vs. 36 cents a year ago.

Philip Morris International (PM) posted earnings of 89 cents, vs. 69 cents, as revenue rose 18%. The firm raised its 2008 earnings forecast by 8 cents per share. Philip Morris said it will acquire Interval and other trademarks from the Imperial Tobacco Group for 254 million euros.

Wellpoint (WLP) posted earnings of $1.07 per share, down from $1.26 a year ago, as revenue rose 3.5%.

Safeco (SAF) agreed to be acquired by Liberty Mutual Group in a $6.2 billion deal.

MetLife (MET) says its board authorized another $1 billion in stock buybacks. About $261 million remains of a previous, $1-billion stock repurchase program announced in January.

Major European indexes turned positive on Wednesday. In London, the FTSE 100 index gained 0.81% to 6,083.60. Paris' CAC 40 index added 1.48% to 4,944.65, and Germany's DAX index rose 0.99% to 6,795.03.

In Asia, Japan's Nikkei 225 was up 0.23% to 13,579.16, while Hong Kong's Hang Seng index gained 1.4% to 25,289.24.

Treasury market

Treasury prices fell Wednesday. The ten-year note slid 11/32 to 98-02/32 for a yield of 3.74%, while the 30-year bond tumbled 21/32 to 98-04/32 for a yield of 4.49%.

"Investment capital shifted into equities on the back of growing sentiment that corporate earnings are holding up better than expected," S&P's Marketscope said.

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