Wall St rises as AmEx results reassure

Wall St rises as AmEx results reassure
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First Published: Wed, Jan 28 2009. 08 54 AM IST
Updated: Wed, Jan 28 2009. 08 54 AM IST
New York: US stocks climbed on Tuesday, with the S&P 500 and the Nasdaq up for a third straight day as a rare bit of encouraging news on the earnings front from companies, including American Express, offset fresh signs that consumers remain glum.
American Express jumped nearly 10% and gave the biggest boost to the Dow after the credit card company posted a quarterly profit that surpassed analysts’ forecasts.
Chip maker Texas Instruments, up 3.7% at $15.31, gave the technology sector a welcome reprieve after its quarterly profit fell less than feared. The Philadelphia Semiconductor Index rose 3.5%, capping its first three-day run-up of 2009.
Analysts said investors were beginning to look beyond some of the gloomy news amid hopes about efforts to stabilize the economy.
“You’ve had such a fierce down market that when the news flow is OK, you’re getting some sort of bounces,” said David Katz, chief investment officer at Matrix Asset Advisors in New York. “In terms of American Express, people had braced themselves for a disaster. Although the numbers were poor, they weren’t a disaster.”
The Dow Jones industrial average rose 58.70 points, or 0.72 %, to 8,174.73. The Standard & Poor’s 500 Index gained 9.14 points, or 1.09%, to 845.71. The Nasdaq Composite Index advanced 15.44 points, or 1.04%, to 1,504.90.
After the closing bell, Moody’s Investors Service said it may cut its top ratings on General Electric Co and its finance arm, citing increased uncertainty about outlook. The stock fell 4.6 percent to $12.46 in after-hours trading. During the regular session, American Express shares rose 9.7% to $16.68. Shares of Citigroup jumped 6.6% to $3.55 after its chief executive reiterated his plan to cut costs.
Financials by far contributed the greatest boost to the broader market, sending the S&P financial index up 3.7%.
Worries about the financial sector’s health have been the biggest hurdle for the market, fueling unease about stocks’ performance in January, which is traditionally seen as a guide to the year’s prospects.
The day’s trading, however, was marked by a skittish tone as investors still had to contend with more signs of a weakening consumer. The Conference Board reported that its index of consumer confidence fell to a record low in January.
Additionally, home prices dropped at a record pace in November, according to data from an S&P/Case-Shiller.
The largest drag on the Dow came from Verizon Communications Inc, after the No. 2 US phone company reported fewer-than-expected wireless subscribers for the fourth quarter and warned that pension costs would hurt 2009 earnings.
The Federal Reserve’s monetary policy-setting Federal Open Market Committee began a two-day policy meeting on Tuesday. Investors will watch for signals of any nonconventional methods of fighting the credit crisis at the meeting’s conclusion on Wednesday.
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First Published: Wed, Jan 28 2009. 08 54 AM IST
More Topics: Markets | US | Stocks | Wall Street | American Express |