Earnings reports help stocks rebound
NEW YORK » Wall Street ended an erratic session with a big advance yesterday as investors uneasy about the economy were reassured by solid earnings from blue chip names including Apple Inc. and American Express Co.
Technology stocks were among the biggest gainers after Apple surpassed analysts' expectations with a 67 percent jump in fiscal fourth-quarter profit.
Two component companies of the Dow Jones industrial average -- American Express, one of the largest credit card companies, and chemicals maker DuPont Co. -- posted better-than-expected profit gains as well.
But comments from DuPont CEO Charles O. Holliday Jr. that the company doesn't expect a recovery in the housing market next year reminded investors of the still uneasy forecasts for the economy.
"Housing is obviously still a big concern, and the question is how much does it spill over into the rest of the economy," said Alexander Paris, econo-mist and market analyst for Chicago-based Barrington Research.
The Dow rose 109.26, or 0.81 percent, to 13,676.23.
Broader stock indicators also had solid gains. The Standard & Poor's 500 index rose 13.26, or 0.88 percent, to 1,519.59; the Nasdaq composite index rose 45.33, or 1.65 percent, to 2,799.26.
The Russell 2000 index of smaller companies rose 8.45, or 1.05 percent, to 818.53.
Advancing issues led decliners by a 2 to 1 margin on the New York Stock Exchange, where volume came to 1.15 billion shares compared to 1.39 billion Monday.
Higher energy prices and a weakening dollar are also hanging over the market. Treasury Secretary Henry Paulson said in a speech yesterday that China must allow its currency, the yuan, to gain in value more quickly, to counter imbalances in the economy and make monetary policy more effective in responding to inflation.
Treasury bonds were little changed amid a disappointing auction of new issues, and as investors moved back into stocks. The yield on the 10-year note, which moves inversely to its price, edged higher to 4.41 percent from 4.40 percent Monday.
Oil prices dipped on expectations of rising U.S. crude inventories. A barrel of light, sweet crude fell 75 cents to $85.27 on the New York Mercantile Exchange. The dollar fell against most other major currencies, while gold rose.
So far, roughly 41 percent of the Standard & Poor's 500 index have reported results -- with 51 percent beating expectations, according to the rating agency.
Apple rose $11.80, or 6.3 percent, $186.16.
American Express said late Monday that higher spending by cardholders pushed third-quarter profit up 10 percent. Shares rose $1.79, or 3.2 percent, to $58.66.
DuPont posted a larger profit for the third quarter on agricultural and nutritional products in Latin America and the company boosted its full-year outlook. The stock rose 24 cents to $46.81.
AT&T Inc., the nation's largest telecommunications company, reported profit rose 42 percent after its acquisition of BellSouth Corp. Shares rose 2.1 percent to $42.02.