Corporate earnings boost Wall Street
US stocks managed modest gains yesterday, as better-than-expected corporate profits overshadowed concerns about weak consumer demand.
Positive surprises on the earnings front could boost markets again today as chip maker Intel reported results after the bell that surpassed expectations, driving stock index futures sharply higher.
Intel also gave a forecast for current-quarter revenue that beat analysts’ estimates. Its stock surged 7.4 per cent to $18.08 in extended trade.
Analysts said the bulk of yesterday’s news during the regular session, including a jump in profit from Goldman Sachs, was already accounted for on Monday, when major stock indexes climbed more than 2 per cent in anticipation of strong bank results.
Competing positive and negative earnings reports tempered each other, keeping the markets range-bound.
Gains were muted by lacklustre retail sales data and comments from Dell that second-quarter margins would be lower as demand has shifted toward cheaper computers, such as netbooks.
This was offset by encouraging comments from railroad company CSX’s chief executive and results from Johnson & Johnson that surpassed expectations.
“The sellers had a chance to run with it, but again we found sideline cash ready to come in,” said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors.
“The bottom line is, we think we’re still going to be in this trading range for a little while longer.”
The Dow Jones industrial average added 27.81 points, or 0.33 per cent, to 8,359.49. The Standard & Poor’s 500 Index gained 4.79 points, or 0.53 per cent, to 905.84. The Nasdaq Composite Index rose 6.52 points, or 0.36 per cent, to 1,799.73.
Data showed June retail sales increased 0.6 per cent, which was more than forecast, but a big part of that gain was due to rising gasoline prices.
Excluding autos and gas sales, retail sales registered a fourth consecutive monthly decline. A rebound in sales is considered vital for the economy to bounce back from recession.