Earnings Drive One-Day Rally in U.S. Stocks

Arthi Gupta, Mayank Mehta and Sanjay Barot
29 Apr, 2010
New York City

U.S. stocks gained the most in two months after a string of positive earnings lifted sentiment. Aetna, Motorola, Starwood, Procter & Gamble, Visa and Baidu.com reported better than expected earnings. For-profit colleges stocks declined after undersecretary for education criticized the industry.

[R]4:00 PM New York – U.S. stocks gained the most in two months after a string of positive earnings lifted sentiment. Aetna, Motorola, Starwood, Procter & Gamble, Visa and Baidu.com reported better than expected earnings. For-profit colleges stocks declined after undersecretary for education criticized the industry.[/R]

U.S. stocks closed higher after weekly jobless claims declined and rising earnings from Motorola, Starwood, Baidu and Procter & Gamble. Visa Inc second quarter net surged 33%. Aetna Inc quarterly net increased 29%.

Hewlett Packard agreed to acquire Palm Inc for $1.2 billion.

Akamai Technologies, Inc led gainers in the S&P 500 index with a rise of 16%. Exxon Mobil net climbs 38%. Kellogg announces $2.5 billion buyback. ConocoPhillips net income more than doubles. Waste Management net income climbs 17%. Fortune Brands quarterly profit jumps to $72 million.

European stocks rebounded as Siemens profit surged 54%. Banco Santander SA net increase 6% in the quarter and Bayer posts 63% rise in first quarter net. ArcelorMittal returns to profit in the first quarter.

In nervous trading U.K. stocks closed higher as positive earnings lifted select stocks. Unilever Plc, BSkyB and AstraZeneca gained on higher earnings. Mortgage approvals increased 4.6% in March and home prices in April increased as higher demand.

Stocks in Hong Kong and Shanghai closed lower on the worries that euro zone financial crisis may deepen. Banks reported higher profits. Ping An Insurance Co reported a surge in profit. China Shenhua Energy Co reported better than expected earnings after the close.

The benchmark Sensex index rebounded from the largest one day drop in three months on better than expected earnings, recovering global markets and inflation data. Food price declined in the period. The government launched disinvestment with the proposed 10% stake sale in SJVN Ltd.

Stocks in Australia rebounded after world markets and commodities prices gained. Home price increase growth in March quarter declined to 3.1% from 5.3% in the previous quarter as the recent rate hike takes hold. First half profit at ANZ increased 36%.

North American Markets

Dow Jones Industrial Average increased 122.05 or 1.1% to close at 11,167.32, S&P 500 Index edged higher 15.42 or 1.3% to 1,206.78 and Nasdaq Composite Index added 40.19 or 1.6% to close at 2,511.92. Toronto TSX Composite Index added 123.43 or 1% to 12,200.32.

Latin American Markets Indexes

Mexico IPC Index fell 91.86 or 0.3% to 32,861.00 and Brazil Bovespa Stock Index added 1,322.34 or 2% to 67,978.05.

Europe Markets Review

In London FTSE 100 Index closed higher 14.06 or 0.25% to 5,600.67, in Paris CAC 40 Index increased 36.96 or 0.98% to close at 3,823.96, in Frankfurt DAX index higher 37.88 or 0.62% to close at 6,122.22. In Zurich trading SMI increased 78.57 or 1.19% to close at 6,654.96.

Asian Markets Review

Hang Seng index in Hong Kong decreased 170.48 or 0.81% to 20,778.92 and CSI 300 index in China lower 37.29 or 1.20% to 3,060.06. ASX 200 index in Australia decreased 37.20 or 0.77% to 4,785.60. The FTSE Bursa KL Composite index in Malaysia closed higher 2.69 or 0.20% to 1,335.86 and the markets of Japan were closed today.

The Kospi Index in South Korea decreased 5.49 or 0.32% to close at 1,728.42. SET index in Thailand closed higher 3.71 or 0.50% to 753.20 and JSE Index in Indonesia increased 23.54 or 0.81% to 2,926.86. The Sensex index in India increased 123.39 or 0.71% to 17,503.47.

Commodities, Metals, and Currencies

Crude oil increased $2.23 to $85.45 a barrel for a front month contract, natural gas edged down 35 cents to $3.99 per mBtu and gasoline increased 2.63 cents to 235.90 cents.

Soybean future closed up 2.50 cent to $9.96 a bushel. Wheat futures increased 7.50 cents in Chicago trading to $4.95 a bushel. Sugar closed up 0.43 cents at 15.29 cents per pound.

Gold decreased $3.80 in New York trading to close at $1,168.00 per ounce, silver closed up $0.39 to $18.52 per ounce and copper for the front month delivery decreased 3.60 cent to $3.35 per pound.

Dollar edged lower against euro to $1.3231 and decreased against the Japanese yen to 94.06.

Yield on 10-year U.S. bonds decreased to 3.73% and with 30-year maturities fell to 4.59%.