U.S. Stocks Advance on Earnings, IMF Seeks $400 Billion in Reserves

Bikram Pandey
20 Apr, 2012
New York City

U.S. stocks snapped higher after two days of losses on better than expected earnings from General Electric, Microsoft and McDonald

[R]3:35 PM New York – U.S. stocks snapped higher after two days of losses on better than expected earnings from General Electric, Microsoft and McDonald’s and on the improvement in the German business confidence index. IMF is seeking $400 billion that may be gambled in supporting the euro zone economies.[/R]

U.S. indexes gained momentum after better-than-estimated earnings and leading economic index rose in March. The market sentiment was cautiously positive after Microsoft, General Electric and McDonald’s either met or exceeded expectations.

Investors in Europe also took a note of the improvement in the German sentiment.

For the week, the S&P 500 index increased 0.6% and added 9.7% in the year so far the Nasdaq index decreased 0.3% and up 15.3% for the year so far.

On the earnings front, General Electric first quarter net declined 12% to $3.03 billion and Honeywell first quarter net soared 17% to $823 million. Ingersoll-Rand first quarter net swung to $95.6 million profit. McDonald’s first quarter net rose 5% to $1.27 billion. Microsoft third quarter net fell to $5.1 billion.

Finance ministers are expected to agree to contribute more funding to International Monetary Fund to bolster reserves that will be used to support the euro zone economies. The IMF is seeking $400 billion in additional reserves unlike its willingness to support smaller nations during the Asian crisis in the late nineties.

The European indexes pared gains after trading higher in the day after German business sentiment improved unexpectedly in April. The UK retail sales rose in March. International Airlines Group completed the acquisition of bmi from Lufthansa.

Stocks in Japan closed lower and the benchmark Nikkei index declined for the third week in a row. JFE Holdings said full-year net dropped 68% on stronger yen and flat steel products prices. Freight shippers were higher on the expectations of a recovery in container rates.

Australian stocks gained 0.1% and for the week jumped 1% as world finance ministers and bankers gather in Washington to discuss the euro zone crisis and faltering global economic growth. Woolworths reported weaker than expected quarterly sales results.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond increased to 1.96% and 30-year U.S. bond edged higher to 3.12%.

The U.S. dollar closed nearly unchanged at $1.32 to one euro and inched higher against the Japanese yen to 81.58 yen.

Immediate delivery futures of Texas crude oil increased 78 cents to $103.05 a barrel and Brent crude futures rose 68 cents to $118.68.

In New York trading, futures of natural gas increased 0.02 cents to $1.926 per mbtu and traded near a decade low and gasoline price declined 0.70 cents to 314.71 cents a gallon.

In metals trading, copper added 6.5 cents to $3.69 per pound, gold added $1.80 to $1,643.20 per ounce and silver decreased 14 cents to $31.70.