US stock indexes moving higher on company earnings, encouraging Chinese economic data

By Alex Veiga, The Associated Press

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 per cent, to 1,857 as of 12:27 p.m. (1627 GMT). The Dow Jones industrial average gained 129 points, or 0.8 per cent, to 16,392. The Nasdaq added 40 points, or 1 per cent, 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 per cent, 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 per cent, 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 per cent drop in overall first-quarter earnings.

CHINESE GROWTH: The world’s second-largest economy grew 7.4 per cent from a year earlier in the January-March quarter, down from 7.7 per cent 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 per cent in March after a revised 1.4 per cent 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 per cent, to $13.30 and Eastman Chemical rose $1.79, or 2.1 per cent, 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 per cent, 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 per cent, to $45.25, and Analog Devices, which slid $1.06, or 2 per cent, to $52.12. Microchip Technology shed 70 cents, or 1.5 per cent, to $46.47.

CHILL ON THE TRACKS: Severe winter weather contributed to a 14 per cent 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 per cent, to $27.60.

TREASURYS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.64 per cent from 2.63 per cent late Tuesday.

Top Stories

Top Stories

Most Watched Today