Stocks jump after Citi, Google post results
NEW YORK » Wall Street topped off a strong week with a big rally yesterday, after results from companies like Citigroup Inc. and Google Inc. helped ease investor anxiety about the health of corporate profits.
Investors have been worried that recent data indicate a slowing economy, which would cut into profit growth at some of the nation's biggest companies. But, results so far have shown that earnings, for the most part, are meeting or beating expectations, and the major indexes all posted gains of more than 4 percent for the week.
Citigroup, the nation's biggest bank, encouraged investors with results that didn't contain any big surprises, and a loss that was half the $10 billion recorded for the preceding quarter.
Google helped boost investor sentiment, as well as the tech-heavy Nasdaq composite index, by reporting first-quarter earnings and revenue growth that handily topped analysts' predictions.
"This is the first week of earnings reports, and the marquee companies in general have been able to report good earnings, and the banks have been able to raise capital, and the market is responding to that," said Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto.
The Dow Jones industrial average jumped 228.87, or 1.81 percent, to 12,849.36.
Broader stock indicators also showed sizable advances. The Standard & Poor's 500 index increased 24.77, or 1.81 percent, to 1,390.33, and the Nasdaq rose 61.14, or 2.61 percent, to 2,402.97. The Russell 2000 index of smaller companies rose 13.07, or 1.9 percent, to 721.07.
Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.48 billion shares compared with 1.23 billion shares traded Thursday.
The gains come at the end of a big week for stocks. After a quiet start to the week, the major indexes surged more than 2 percent Wednesday after JPMorgan Chase & Co., Intel Corp. and Coca-Cola Co. reported better-than-expected profits. Stocks then finished mixed Thursday, largely holding their gains. For the week, the Dow rose 4.25 percent, the S&P 500 gained 4.31 percent and the Nasdaq jumped 4.92 percent.
Bond prices rose after initially declining when stocks rallied. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.71 percent from 3.73 percent late Thursday.
And investors appeared unfazed by the latest spike in energy prices. Oil jumped to $117 a barrel for the first time when a militant group in Nigeria said it sabotaged a major oil pipeline.
Light, sweet crude for May delivery rose to a new trading record of $117 in after-hours electronic trading yesterday, after settling up $1.83 at a record $116.69 a barrel on the New York Mercantile Exchange. It was the fifth day in a row crude prices set new records.
Meanwhile, a survey of gas stations by AAA and the Oil Price Information Service found that the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon.
Gold prices fell, while the dollar was mixed against other major currencies.
Citigroup closed up $1.08, or 4.5 percent, to $25.11, while Google surged $89.87, or 20 percent, to $539.41 after the companies issued their reports.
Heavy equipment maker Caterpillar Inc. rose $6.69, or 8.5 percent, to $85.28 after reporting that demand for its global mining and energy products drove first-quarter earnings up a better-than-expected 13 percent.