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Investors betting
on solid earnings
NEW YORK >> Investors set aside their concerns about Iraq yesterday, sending stocks solidly higher on expectations of companies' robust first-quarter earnings reports. All three major indexes regained the ground they lost last week.
Analysts said investors appear to have factored the increased fighting in Iraq and continued threat of terrorism into their overall investment decisions.
"As callous as it sounds, we're now part of that situation where the world has terrorism at its doorstep, we'll digest that and we'll start trading on the fundamentals," said Bill Groenveld, head trader for vFinance Investments. "We're just getting back to business as usual."
The Dow Jones industrial average rose 73.53, or 0.7 percent, to 10,515.56. The Dow lost 0.3 percent last week.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 5.88, or 0.5 percent, at 1,145.20, and the Nasdaq composite index gained 12.60, or 0.6 percent, to 2,065.48. Both the S&P 500 and the Nasdaq were down 0.2 percent last week.
The 10-year note dropped 1032 to 98532, with its yield gaining 4 basis points to 4.23 percent.
Stocks stumbled last week, stalling a rally that had begun in late March, as investors reacted nervously to daily news reports of increasing violence in Iraq. But yesterday, investors made bets ahead of the bulk of earnings reports, hoping corporate giants like Merrill Lynch & Co., Johnson & Johnson, Citigroup and IBM Corp., all releasing earnings this week, will have some significant upside. Their optimism was fed by upbeat reports last week from General Electric Co. and Yahoo! Inc.
"I'm kind of surprised we're up this much given the situation in Iraq," said Todd Leone, managing director of equity trading at SG Cowen Securities. "I think people looked at stocks like Yahoo, which had a nice jump, and they're trying to get ahead of earnings to take advantage of some of the upside coming up."
Two media companies, Gannett Co. and the New York Times Co., announced earnings before the session began. Gannett saw a 10 percent hike in first-quarter profits, and earnings were in line with estimates. Gannett lost $1.20 to $89.22.
The New York Times Co. was down 34 cents at $46.73 after announcing profits that declined 15 percent year-over-year. However, the company beat Wall Street expectations by 2 cents per share.
Kimberly-Clark Corp., maker of consumer products such as Kleenex and Huggies diapers, slipped 23 cents to $63.57 as it announced earnings would be higher than previously estimated. The company was expected to report first-quarter earnings April 22.
Microsoft Corp. gained 13 cents to $25.61 as it announced a $400 million settlement with InterTrust Technologies Corp. over a long-standing patent dispute.
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