Stocks Rise on Bank Earnings, Strong Jobs Data
The Dow Jones Industrial Average gained 45 points, or 0.4%, to finish at 12,624. The S&P 500 rose 6.5 points, or 0.5%, to settle at 1,314.50, while the Nasdaq gained 19 points, or 0.7%, to close at 2,788.
Thursday was a busy day for fourth-quarter corporate earnings, with fourth tech titans reporting after the close. Google (GOOG) reported earnings per share of $9.50 on revenue of $8.83 billion. Shares fell in late trades as Wall Street was looking for a profit of $10.49 per share.
Shares of Intel (INTC)and IBM (IBM) rose in the extended session. IBM reported earnings of $4.71 per share on revenue of $29.9 billion, topping the average analysts' forecast for a profit of $4.62 per share in earnings.Intel's revenue came in at $13.9 billion, topping the $13.7 billion expected by analysts. The company's earnings were 68 cents a share, beating the 61 cents expected. Microsoft (MSFT) reported earnings per share of 78 cents a share on revenue of $20.9 billion. Analysts had expected 76 cents a share in earnings. Financial stocks helped buoy the market Thursday. Bank of America (BAC), which lost its status as the U.S.'s largest lender by assets to JPMorgan Chase (JPM) last quarter, reported in the morning that it earned $2 billion, or 15 cents a share, in the fourth quarter, in line with analysts' expectations, according to Thomson Reuters. Bank of America shares rose 2.4% to $6.96. Morgan Stanley (MS) posted a fourth-quarter loss of 14 cents a share when analysts had forecast a loss of 58 cents. Shares climbed 5.4% to $18.28. Also helping sentiment was a Labor Department report showing that the number of Americans filing for first-time unemployment benefits fell to the lowest level since April 2008. Initial jobless claims dropped 50,000 to 352,000 from a revised 402,000. Economists expected claims to fall to 383,000. "One week is not a trend, but this continues a clear downshift in claims, which emerged towards the end of last year when businesses realized that the meltdown in demand they feared, in the wake of the drop in consumers' confidence, had not happened," Ian Shepherdson, chief economist at High Frequency Economics, wrote. "It is just about inconceivable that such a sustained downshift would not be followed quickly by substantially faster payroll gains." In a sign that inflation is easing, the Bureau of Labor Statistics said that consumer prices stayed put in December. Analysts expected the consumer price index to climb 0.1%, according to estimates from Zacks.com. Housing starts fell 4.1% to an adjusted annual rate of 657,000 units in December from a revised 680,000 in November, according to a Census Bureau report. Analysts expected housing starts to fall to 675,000 units. Building permits fell 0.1% to 679,000 from a revised 680,000 in the previous month.
The Federal Reserve Bank of Philadelphia also added to promising economic news by reporting that manufacturing in the region expanded at a faster pace this month as employment increased. The regional Fed bank's economic index increased to 7.3 from 6.8 last month, although it missed expectations for a reading of 10, according to Thomson Reuters. In Europe, France inspired investor confidence after successfully auctioning off 7.965 billion euros of bills. The country held its first longer-term bond auction since the credit rating downgrade by Standard & Poor's last Friday. The rating agency's announcement seemed to have little effect on French bond values as yields fell Thursday. Spain also successfully sold longer-term notes at its first auctions since S&P's downgrade. Spanish yields fell by1.572% on 10-year notes, while inching higher on bonds maturing in 2016. Germany's DAX closed 0.9% higher while London's FTSE was up 0.5%. Japan's Nikkei Average settled 1% higher and Hong Kong's Hang Seng climbed 1.3%.
2012 Stock Predictions and Outlook
|Your one-stop shop for 2012 stock recommendations and market predictions.
March oil futures fell 19 cents to $100.57 a barrel after the American Petroleum Institute reported late Wednesday that U.S. crude oil inventories unexpectedly dropped last week. February gold futures fell $5.40 to 1654.50 an ounce. The dollar index was dropping 0.4%. The benchmark 10-year Treasury was falling 23/32, increasing the yield to 1.979%. -- Written by Chao Deng and Kaitlyn Kiernan in New York. >To contact the writer of this article, click here: Chao Deng. >To follow the writer on Twitter, go to: @chao_deng >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV