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Dow industrials at five-year high as US stocks advance
2013-01-30 00:07:56.929 GMT
Washington (DPA) -- The Dow Jones Industrial Average reached a
five-year high on Tuesday to lead Wall Street into mostly
positive territory after major companies reported earnings that
beat estimates.
The blue-chip Dow Jones industrials added 72.49 points, or 0.5
per cent, to 13,954.42. The broader Standard & Poor's 500 Index
gained 7.66 points, or 0.51 per cent, to 1,507.84. The
technology-heavy Nasdaq Composite Index dipped 0.64 points, or
0.02 per cent, to 3,153.66.
The US currency was down against the euro at 74.13 euro cents
from 74.36 on Monday. The dollar edged up against the Japanese
currency to 90.87 yen from 90.7 yen.
U.S. Stocks Advance on Earnings as Oil Reaches Four-Month High
2013-01-29 21:24:46.29 GMT
By Stephen Kirkland and Sarah Pringle
Jan. 29 (Bloomberg) -- U.S. stocks rose on better-than-
forecast earnings from companies including Pfizer Inc. and
Valero Energy Corp., returning benchmark indexes to five-year
highs. Oil helped lead a rally in commodities as global reports
boosted economic confidence, while the dollar fell.
The Standard & Poor’s 500 Index added 0.5 percent to
1,507.84 at 4 p.m. in New York and the Dow Jones Industrial
Average jumped to the highest since October 2007, the month of
its record. Oil climbed 1.2 percent to a four-month high of
$97.57 a barrel and silver jumped 2 percent to send the S&P GSCI
Index of commodities to the highest level since October. The
euro strengthened 0.3 percent to $1.3490, its strongest since
2011. Ten-year Treasury yields were almost 2 percent a day after
rising above that threshold for the first time since April.
The S&P 500 extended its best start to a year since 1989 as
profit beat the average analyst estimate at 75 percent of the
175 companies in the index that posted results so far this
reporting season. U.S. home prices rose by the most in six
years, the 20-city S&P/Case-Shiller index showed, while reports
from Germany to Australia signaled improved global sentiment.
Equities remained higher even as U.S. consumer confidence fell
more than forecast in January, reaching the lowest level in more
than a year.
“The market’s responding favorably to, and will continue
to respond favorably to, the earnings reporting season because
the majority of companies will beat expectations,” Hank Smith,
who helps oversee $6.5 billion as chief investment officer of
Haverford Trust Co. in Radnor, Pennsylvania, said in a phone
interview. “The market is all about expectations.”
Earnings Season
The S&P 500 has more than doubled from a 12-year low in
2009 as corporate earnings grew for three years and the Federal
Reserve increased its bond purchases to keep interest rates low
to spur growth. The S&P 500, which has rallied 5.7 percent so
far this year, is less than 4 percent below its record of
1,565.15 set in October 2007 while the Dow Jones Industrial
Average is less than 2 percent from its all-time high the same
month.
U.S. companies from Pfizer to 3M Co. are beating analysts’
quarterly sales estimates at the highest rate in 1 1/2 years,
undeterred by political gridlock in Washington and slowing
demand in China. The 67 percent beat rate is the highest
percentage since the second quarter of 2011, according to data
compiled by Bloomberg. Fewer than half the companies had
surprise sales gains in the second and third quarters.
Pfizer rallied 3.2 percent as adjusted earnings beat
projections and the drugmaker forecast higher-than-expected
full-year profit after introducing two products with the
potential to each generate more than $1 billion a year.
Energy shares climbed as Valero jumped 13 percent to a
four-year high after posting a 20-fold gain in earnings and Paul
Singer’s Elliott Management Corp. urged Hess Corp. to consider a
spinoff of U.S. shale assets, sending its shares up 9 percent in
the biggest gain since 2008. Ford Motor Co. slid 4.6 percent
after saying it expects to lose about $2 billion in Europe this
year as a likely recession in the region continues to sap demand
for cars.
Housing Data
D.R. Horton Inc. jumped 12 percent, the most in almost four
years, to lead a rally in homebuilders after earnings more than
doubled in its fiscal first quarter amid low mortgage rates and
a shrinking inventory of existing residences.
The S&P/Case-Shiller index of property values increased 5.5
percent in November, the biggest year-over-year gain since
August 2006. The median projection of 30 economists surveyed by
Bloomberg called for a 5.6 percent advance. The Conference
Board’s index of consumer confidence decreased to 58.6, the
weakest since November 2011, from a revised 66.7 in December,
figures from the research group showed today, as higher payroll
taxes took a bigger bite out of Americans’ paychecks.
Asset Purchases
Silver, lead, copper and gold increased at least 0.6
percent as 18 of 24 commodities in the S&P GSCI Index climbed,
sending the gauge to the highest since October.
Gold holdings in exchange-traded products are poised for
the biggest monthly decline in more than a year as global
economic recovery curbs demand for the metal. Assets contracted
0.8 percent so far in January, the largest decrease since
December 2011, according to data compiled by Bloomberg. The
holdings, which reached a record in December, dropped to a two-
month low of 2,610.272 metric tons yesterday.
Analysts from Credit Suisse Group AG to Goldman Sachs Group
Inc. are calling for gold to peak in 2013 after a 12-year rally
as the global economy rebounds. U.S. durable-goods orders rose
in December for an unprecedented fourth consecutive month, data
showed yesterday, while China’s economy snapped a seven-quarter
slowdown in the final three months of 2012.
Cotton Production
Cotton jumped 1.7 percent to 82.39 cents a pound and is up
9.6 percent in January, heading for the biggest monthly gain in
two years. Plunging production in the U.S., the world’s largest
exporter, will help erode a global surplus and send prices
surging as much as 17 percent this year, according to T&K
Futures & Options Inc.
The U.S. dollar fell against 15 of its 16 major
counterparts as investors pared expectations that the Fed will
signal a change to its asset-buying program at the end of a two-
day meeting tomorrow. The Fed’s latest round of bond buying will
reach $1.14 trillion before it ends the program in the first
quarter of 2014, according to median estimates in a Bloomberg
survey of economists.
Investor speculation that the Fed will end its third round
of quantitative easing in 2013 is overdone, Bank of America
Merrill Lynch economist Michael Hanson and strategist Priya
Misra told clients in a note. Tomorrow’s statement from the
Federal Open Market Committee is likely to keep the central
bank’s current policy stance in place, they said.
‘Very Curious’
“The Fed meeting will be, as always, very closely
watched,” Smith said. “The market’s going to be very curious
and read into any commentary as to if the Fed lets on when this
non-traditional easing will start to end.”
The Stoxx Europe 600 Index added 0.3 percent, returning to
an almost two-year high after slipping 0.1 percent yesterday.
Royal Philips Electronics NV climbed 2.3 percent after the
world’s largest lighting manufacturer reported fourth-quarter
results that topped analyst estimates. William Hill Plc gained
2.1 percent after the bookmaker reporter a jump sales. Anglo
American Plc led mining companies higher, rallying 3 percent.
Software AG tumbled 17 percent after posting fourth-quarter
earnings and sales that missed analysts’ estimates.
‘Stock Picking’
“There’s a real opportunity for stock picking now,”
Daniel Morris, a global strategist at JPMorgan Chase & Co. in
London, said on Bloomberg Television. “Even if you do see a bit
of a dip in equity markets, you can buy now. The market is
somewhat inexpensive relative to history.”
German two-year notes rose for the first time in four days,
sending the yield three basis points lower to 0.27 percent,
after the European Central Bank said it will lend banks 124.1
billion euros ($166.7 billion) for seven days, little changed
from the previous week.
The rate on two-year Italian debt fell four basis points to
1.53 percent as borrowing costs fell at a government auction of
bills.
India’s rupee strengthened against 13 of 16 major
currencies as the central bank cut borrowing costs and the
amount of deposits lenders must set aside as reserves.
Emerging Markets
The MSCI Emerging Markets Index rose 0.8 percent, snapping
four days of losses. South Korea’s Kospi index jumped 0.8
percent. The Shanghai Composite Index climbed 0.5 percent,
extending gains from a low on Dec. 3 to more than 20 percent,
the threshold for a bull market.
Egypt’s benchmark EGX 30 Index retreated 2 percent after
the country’s main opposition bloc rejected talks with President
Mohamed Mursi, signaling the nation’s political crisis may be
prolonged. The Tel Aviv 25 Index slipped 0.9 percent after Bank
of Israel Governor Stanley Fischer informed Prime Minister
Benjamin Netanyahu of plans to step down on June 30. |
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MARKET WATCH 30 JAN 2013
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