US shares buoyed by Goldman stock rise
US stocks rose for a second consecutive day yesterday, led by gains in shares of Goldman Sachs and strength in beaten-down homebuilders and raw materials companies.
Goldman Sachs Group rose 2.2 per cent as buyers materialised after an early selloff on news the investment bank’s quarterly earnings tumbled 82 per cent, steeper than forecast.
“Most stocks opened weaker, so it was a buying opportunity for people willing to take the risk,” said Peter Costa, president at Empire Executions in New York.
The Dow Jones industrial average rose 75.53 points, or 0.74 per cent, to 10,229.96. The Standard & Poor’s 500 Index gained 12.23 points, or 1.14 per cent, to 1,083.48. The Nasdaq Composite Index added 24.26 points, or 1.10 per cent, to 2,222.49.
Stock could extend gains for a third straight day as futures rose after Apple reported results that surpassed Wall Street’s forecasts.
Shares of Apple, maker of the iPhone and iPad, gained 3.2 per cent to $260 in extended-hours trading.
Some market analysts said the late buying during the regular session was driven in part by speculation that the Federal Reserve would take steps to spur lending by eliminating interest paid on excess bank reserves held at the Fed.
Housing starts fell more than expected in June, the government said, but applications for building permits, a measure of future activity, unexpectedly rose.
“It looks like things have turned around on economic news, which was better than earnings today,” said Andy Fitzpatrick, director of investments at Hinsdale Associates, in Hinsdale Illinois.
The materials sector, up 2.9 per cent, led gains on the S&P 500, helped by a 2.5 per cent jump in copper futures – the largest daily percentage gain in almost a month.
International Business Machines (IBM) fell 2.5 per cent to $126.55 a day after reporting quarterly revenues missed estimates as new technology services contracts declined. IBM, the world’s biggest technology services company, was the top drag on the Dow.
Texas Instruments also missed revenue expectations due to weaker-than-expected orders from one mobile phone customer, and shares of the chipmaker dropped 3 per cent to $24.78.
In after-hours trading, Internet company Yahoo dropped 6.3 per cent to $14.25 – despite the firm’s earnings increase – after net revenue fell short of Wall Street expectations.