US stocks ended higher on Wednesday for the second straight session, lifted by better-than-expected earnings from companies such as Texas Instruments Inc and a retreat in crude oil prices. It was only the second time this year that the Dow, the S&P 500 and the Nasdaq posted two consecutive days of gains. Equities have had a poor start to 2005 and on Monday, all three indexes closed at their lowest since November. Among stocks gaining was S&P 500 component Texas Instruments, which climbed 7.3 percent, or $1.54, to $22.66, a day after the world's largest maker of chips for cell phones posted earnings that topped a forecast it gave in December.
Drug maker Eli Lilly and Co, an S&P 500 stock, rose 1.2 percent, or 65 cents, to $55.50 after it reported that earnings excluding special items beat analysts' estimates.
The Dow Jones industrial average was up 37.03 points, or 0.35 percent, to close at 10,498.59. The Standard & Poor's 500 Index was up 5.66 points, or 0.48 percent, to end at 1,174.07. The Nasdaq Composite Index was up 26.14 points, or 1.29 percent, to finish at 2,046.09 - its biggest gain so far this year.
Overall, trading was active, with 1.64 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 2.13 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year. Advancers outnumbered decliners on the New York Stock Exchange by about 8 to 3 and by about 7 to 3 on Nasdaq.
"The market had got oversold," said Sam Rahman, portfolio manager at Baring Asset Management. "Having been super-bullish late last year, sentiment went very quickly - in the space of three weeks - from being very positive on the economy and earnings to very negative on a number of things."
A fall in oil prices helped boost stocks. NYMEX March crude, which earlier had neared the $50-a-barrel mark, fell 86 cents to settle at $48.78 a barrel. Lower oil prices generally boost equities because they help lift consumer spending and corporate profit margins.
Among other issues, investors were increasingly focused on mounting tension ahead of the Iraqi elections on January 30. Rahman thought that if there was a strong turnout from voters, it would be a positive for the markets next week.
Meanwhile, Johnson & Johnson rose 1.5 percent, or 97 cents, to $64.65, extending gains from Tuesday when the health-care company reported fourth-quarter profits that beat analysts' estimates.
"Good earnings reports are being reacted to positively," Rahman said. "I think when we come out of this earnings period and look at the aggregate numbers, we'll still see more companies generating strong earnings growth versus companies that didn't."
Nasdaq got a lift from Electronic Arts Inc, the video game publisher, which rose 9.2 percent, or $5.30, to $62.84, a day after it posted profits for its fiscal third quarter that beat market expectations.
Flextronics International Ltd, the No 1 contract electronics manufacturer, jumped 12.2 percent, or $1.52, to $13.94 a day after it posted sharply higher quarterly earnings.
After the closing bell, Starbucks Corp, the world's largest coffee shop chain, fell 2.7 percent to $53.86 on the Inet electronic brokerage, despite reporting higher quarterly net income and raising its earnings forecast for the year. During regular trading, Starbucks stock rose 2.5 percent, or $1.34, to close at $55.34 on Nasdaq.
Also after the bell, JDS Uniphase Inc, a maker of equipment to build fiber optic networks, fell more than 7 percent to $2.27 on Inet, from its $2.45 close on Nasdaq, after it said its quarterly loss before items widened.
Comments
Comments are closed.