Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Rally on Earnings, German Data, After Two-Day Selloff

02/22/2013 | 04:36pm US/Eastern

--U.S. stocks gain after two-day drop

--German business confidence tops expectations

--H-P, AIG rally after reporting quarterly results

 
   By Matt Jarzemsky 
 

The Dow industrials posted their third triple-digit-point gain of the year, as Hewlett-Packard and American International Group AIG rallied on earnings and a reading on German business confidence topped expectations.

The Dow Jones Industrial Average advanced 119.95 points, or 0.9%, to 14000.57, reversing most of a 155-point slide from the prior two days.

The Standard & Poor's 500-stock index tacked on 13.18 points, or 0.9%, to 1515.60. The Nasdaq Composite Index rose 30.33 points, or 1%, to 3161.82.

"Any selloff we get is going to be shallow," said Scott Wren, senior equity strategist at Wells Fargo Advisors, which manages $1.2 trillion in St. Louis. "The mentality is, 'I want to wait for the market to pull back so I can buy stocks at lower levels.' The Fed's on our side, companies are making money and the growth environment is OK."

Hewlett-Packard gained 12%, leading the Dow higher, after the technology company late Thursday reported a quarterly profit that topped analysts' expectations and gave a better-than-expected earnings forecast.

AIG rose 3.1% after saying late Thursday that it swung to a loss, but operating profit in some segments exceeded analyst expectations.

For the week, the Dow finished with a 0.1% gain, while the S&P 500 slipped 0.3% to snap a seven-week streak of weekly gains.

Weighing on the benchmarks this week, minutes from the Federal Reserve's latest policy meeting released Wednesday showed some officials feared the consequences of low-interest-rate policies and asset-purchase programs meant to aid the economy. That sparked U.S. stocks' biggest two-day selloff of the year, as such policies have been a boon to stocks. But strategists said the pullback also set the stage for Friday's rebound.

"In my mind, the market overreacted to what the Fed minutes said," Mr. Wren said. "[Fed officials] are going to leave rates low and they're going to be buying low-risk securities for quite a while."

European markets rose, with the Stoxx Europe 600 up 1.3% to recover most of the losses from the previous session, after data showed German business confidence increased much more than expected in February. The index advanced 0.4% on the week.

Germany's DAX index climbed 1% and gained 0.9% for the week. The measure is up 0.7% this year.

"From the U.S. perspective, Germany is a very industrial and export-oriented economy; If they're seeing optimism on their order books, then there's reason to be optimistic globally," said Wasif Latif, vice president of equity investments at USAA Investments in San Antonio. His firm manages $54 billion.

Elsewhere, Italy's FTSE MIB index advanced 1.4%. The index had fallen this week to close Thursday at a two-month low ahead of general elections in Italy this weekend. Some investors fear a new government may not continue the country's reformist path.

In Asia, China's Shanghai Composite fell 0.5% to a one-month low and declined 4.9% on the week. Hong Kong's Hang Seng Index also shed 0.5%, dropping 2.8% for the week, to near a two-month low. Investors are concerned that policy makers will implement additional tightening measures to control residential property prices.

Japan's Nikkei Stock Average gained 0.7% and climbed 1.9% on the week. The index has risen 14 of the past 15 weeks and has climbed 9.5% this year. Australia's S&P/ASX 200 added 0.8%, rebounding from losses on Thursday, but fell 0.3% on the week, snapping a five-week winning streak.

Crude-oil prices rose 0.3% to settle at $93.13 a barrel, while gold retreated 0.4% to $1,572.40 a troy ounce, its lowest settlement price this year. The dollar rose against the yen and euro. The 10-year Treasury note edged up in price, pushing its yield down to 1.965%.

In other corporate news, Cabot Oil & Gas jumped 11% after the natural-gas producer's earnings climbed 55% on higher production.

Texas Instruments advanced 5.2% after the chip maker unveiled a 33% increase in its quarterly dividend late Thursday and increased its stock-repurchase authorization by $5 billion.

Abercrombie & Fitch slipped 4.5% after giving an earnings forecast that lagged analysts' projections and saying it expects to close 40 to 50 stores in the U.S. in 2013.

Vivus dropped 2.3% after the pharmaceutical company said Thursday that a European Medicines Agency committee backed an earlier decision, in which the panel recommended against approval of its weight-loss drug.

WebMD Health surged 25% after the health-information provider's adjusted fourth-quarter earnings and revenue beat analyst estimates late Thursday and its 2013 earnings outlook topped forecasts.

-Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com

React to this article
Latest news
Date Title
02:15a GAP : Statement of Gap Inc. on the Nepal Earthquake Disaster
02:15a HORIZON DISCOVERY : Transgenomic to incorporate Horizon Discovery’s Genomic Reference Standards into Multiplexed ICE COLD-PCR™ kits
02:13a NAT WEST B PRF NON CUM $ PRF SER'B'US$25 : TfL left a gap in my finances by taking two £1,284 payments
02:12a MANCHESTER UNITED : LVG flying the flag for Ryan heir
02:12a KELLY ON BGT : Cowell was disrespectful ; EX JUDGE LIFTS LID ON SIMON
02:12a MANCHESTER UNITED : PRIDE & GROOM ; SIR ALEX FERGUSON EXCLUSIVE UNITED: THE FUTURE Fergie wants new United boss to beat his trophy haul...and Giggs is the man
02:12a LLOYDS BANKING : ENJOY a Steakation getaway
02:11a MANCHESTER UNITED : Basque kids fit Bil for ; HOTLINE
02:11a JUVENTUS FOOTBALL CLUB : Carlo is the Man for Real
02:10a MANCHESTER UNITED : Jose must beware LVG ...Louis van Gunslinger
Latest news
Advertisement
Hot News 
GCP STUDENT LIVING : Dividend Declaration and Net Asset Valuation
AERIE PHARMACEUTICALS : Pharma plunges aftermarket as Rhopressa study fails
SYQIC : Gets Working Capital Facility Offer, Improves Cash Position
INNATE PHARMA : and AstraZeneca announce global agreement for IPH2201 in immuno-oncology
French Connection warns on full-year results
Most Read News
04/25 DEUTSCHE BANK : to keep 500 German retail branches - Welt am Sonntag
04/25 KROGER : accounting celebrates 20 years of growth in Hutchinson
04/25 MANCHESTER UNITED : Rooney, Abramovich, Branson in UK Rich List
04/25 SOLARCITY : Town of Plattsburgh exploring solar project
04/25 MICROSOFT : Forty Years and a Big Slip
Most recommended articles
12:23a Cuts to pay and perks trigger flight from China's state banks
04/25DJNepal Quake Brings Everest Avalanche -- Update
04/25 Germany hints at preparations of a Plan B on Greece
04/25 DEUTSCHE BANK : to keep 500 German retail branches - Welt am Sonntag
04/25 Ruthless Volkswagen patriarch Piech overplays last hand
Dynamic quotes  
ON
| OFF