Stocks Extend Gains for Third Day 04/16 12:18
Investors sent stock prices higher for a third day in a row Wednesday. Major
U.S. indexes rose as more companies reported solid earnings and traders
welcomed encouraging news about China's economy. Yahoo and Delta Air Lines were
among the companies rising sharply in afternoon trading.
(AP) -- Investors sent stock prices higher for a third day in a row
Wednesday. Major U.S. indexes rose as more companies reported solid earnings
and traders welcomed encouraging news about China's economy. Yahoo and Delta
Air Lines were among the companies rising sharply in afternoon trading.
KEEPING SCORE: The Standard & Poor's 500 index rose 14 points, or 0.8
percent, to 1,857 as of 12:27 p.m. Eastern Time. The Dow Jones industrial
average gained 129 points, or 0.8 percent, to 16,392. The Nasdaq added 40
points, or 1 percent, to 4,074. All three indexes are up for the week but are
still down for the month after several days of choppy trading.
EYE ON EARNINGS: Investors are closely monitoring company earnings this week
as they try to assess whether the negative impact that severe weather this
winter had on many companies has begun to ease. Financial analysts expect
first-quarter earnings for the S&P 500 will decline about 1.2 percent,
according to S&P Capital IQ.
"We do think ... the market is focused on what seems to be a worst-case
scenario not being realized," said Jim Russell, senior equity strategist at
U.S. Bank Wealth Management. "Expectations are low enough where many companies
will either meet or beat expectations."
YAHOO FOR ASIA: Yahoo jumped $2.30, or 6.7 percent, to $36.52. The Internet
pioneer reported late Tuesday that it is making most of its money from its
stakes in two Asian Internet companies, China's Alibaba Group and Yahoo Japan.
That overshadowed a 20 percent drop in overall first-quarter earnings.
CHINESE GROWTH: The world's second-largest economy grew 7.4 percent from a
year earlier in the January-March quarter, down from 7.7 percent in the
previous quarter, China's government reported. The growth rate appeared strong
enough to satisfy Chinese leaders who are trying to put the country on a more
sustainable path without politically dangerous job losses.
FACTORIES HUMMING: The Federal Reserve said Wednesday that factory
production rose 0.5 percent in March after a revised 1.4 percent surge in
February. The gains over the past two months point to a rebound after a winter
slowdown in January and December stalled growth across the economy, and are a
sign of greater demand by businesses and consumers.
SECTOR WATCH: All 10 sectors in the S&P 500 index rose, led by companies
that make basic materials. That's a bullish sign because those companies tend
to prosper more than others when the economy is expanding and manufacturing and
construction pick up speed, increasing demand for industrial materials like
metals. Aluminum maker Alcoa rose 24 cents, or 1.8 percent, to $13.30 and
Eastman Chemical rose $1.79, or 2.1 percent, to $88.04.
LITIGATION LETDOWN: Bank of America slumped after reporting a loss in the
first quarter. The bank booked $6 billion in costs related to a previously
disclosed legal settlement over its home loan lending practices. BofA fell 36
cents, or 2.2 percent, to $16.04.
TROUBLED TECH: Shares in several companies that make circuits for
electronics or data storage took a beating Wednesday. Among the biggest
decliners were Linear Technology, which fell $1.89, or 4 percent, to $45.25,
and Analog Devices, which slid $1.06, or 2 percent, to $52.12. Microchip
Technology shed 70 cents, or 1.5 percent, to $46.47.
CHILL ON THE TRACKS: Severe winter weather contributed to a 14 percent drop
in CSX's first-quarter earnings, even as the railroad company's freight volume
grew modestly. CSX executives expect modest profit growth for the year, but
they also said the impact of the harsh winter will linger into the current
quarter. CSX fell 69 cents, or 2.4 percent, to $27.60.
OVERSEAS: Germany's DAX rose 1.6 percent while France's CAC-40 rose 1.4
percent. The FTSE 100 index of leading British shares was down 0.6 percent. In
Asia, Hong Kong's Hang Seng gained 0.1 percent. China's Shanghai Composite
Index added 0.2 percent. The Nikkei 225 index jumped 3 percent.
TREASURYS: Bond prices fell. The yield on the 10-year Treasury note rose to
2.64 percent from 2.63 percent late Tuesday.