Stocks revived Thursday as strong earnings from two healthcare giants and a rebound in Japan took investors' minds off the flailing tech sector.
Index futures recently showed both the
and Nasdaq 100 trading 3 points above fair value. The 10-year Treasury bond was down 9/32 in price to yield 4.37%, while the dollar rose against the yen and euro.
Oil prices firmed ahead of Energy Department data on U.S. storage inventories. February crude was recently up 12 cents to $65.84 after losing 58 cents on Wednesday. According to a
survey, crude stocks are expected to have fallen last week by 400,000 barrels, while distillates likely rose by 2.3 million barrels.
said fourth-quarter earnings eased 3% from a year ago to $2.73 billion, or 37 cents a share, while sales fell 9% to $13.59 billion. Adjusted earnings of 51 cents a share, however, were 9 cents better than expected, reflecting stronger-than-expected sales of some new drugs and cost cutting.
also topped estimates, reporting earnings of 67 cents a share before a charge, 2 cents better than expected. Sales rose 15% to $12.05 billion, beating forecasts for $11.7 billion.
Japanese stocks staged a solid rebound overnight as the panic surrounding Internet company Livedoor faded. The Nikkei climbed 2.3% to 15,696, making up about a third of loss it sustained in the days since prosecutors raided Livedoor on suspicions of malfeasance. Elsewhere, Hong Kong's Hang Seng gained 1.2% to 15,670, London's FTSE 100 was up 0.5% to 5690 and Germany's Xetra DAX added 0.3% to 5414.
Overseas strength helped mute the impact of two more problematic earnings reports from tech companies
Late Wednesday, Apple said first-quarter earnings rose 92% to $565 million, or 65 cents a share, while sales rose 65% to $5.75 billion. Both numbers easily beat analyst forecasts. But Apple also said it expects to earn 38 cents a share on sales of $4.3 billion in the second quarter. Analysts wanted 48 cents a share and $4.6 billion, on average.
At eBay, the fourth-quarter pro forma profit came in at 24 cents a share on sales of $1.33 billion. Analysts surveyed by Thomson First Call were expecting 22 cents a share on sales of $1.29 billion. But eBay put its 2006 pro forma EPS at 96 cents to $1.01 on sales of $5.7 billion to $5.9 billion. Analysts wanted $1.02 a share on $5.9 billion.
The disappointing profit forecasts followed similarly anemic outlooks from
. Those estimates sent the
down 1% in Wednesday's session and brought its two-day loss to 1.6%. The
and S&P 500 both lost about 0.4% on Wednesday.
Two homebuilders issued solid earnings reports Thursday morning.
first-quarter earnings rose 29% from a year ago to $90 million, or $2 a share, while revenue rose 22% to $1.11 billion. Analysts had been forecasting $1.96 a share and $1.05 billion in revenue.
also posted a 29% rise in first-quarter earnings to $310.1 million, or 98 cents a share, while sales jumped 15% to $2.84 billion. Analysts were expecting earnings of 94 cents a share on sales of $2.98 billion. The company raised its 2006 earnings view to $5.25 to $5.35 a share from $5.22 to $5.32 a share.