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Earnings optimism lifts Wall Street, Alcoa up

Earnings optimism lifts Wall Street, Alcoa up
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First Published: Tue, Apr 12 2011. 10 18 AM IST
Updated: Tue, Apr 12 2011. 10 18 AM IST
New York: US stocks rose on Monday on hopes of strong corporate earnings as aluminum company Alcoa will be the first Dow component to release first-quarter results.
Alcoa, which is due to report after the market’s close, rose 1.4% to $18.17. The company is expected to report earnings of 27 cents per share on revenue of $6.07 billion, according to Thomson Reuters estimates.
The earnings season is off to a good start because of the economy, but companies are likely to come out with conservative outlooks, Jonathan Golub, strategist at UBS in New York, said.
“With the scars from the financial crisis still healing, it’s no surprise that managements have been cautious in their guidance,” he said.
Concerns about the impact of natural disasters and geopolitical turmoil mean companies are more likely to play it safe and highlight the uncertainty of supply chain disruptions emanating from Japan and rising input costs, Golub said.
Market reaction was relatively calm after another strong aftershock struck northeast Japan on Monday and the evacuation zone around a crippled nuclear plant was expanded.
Shares of Biogen Idec Inc rose 5.4% to $77.32 after the company’s experimental multiple sclerosis drug met the main goal in the first of two important late-stage studies.
Endo Pharmaceuticals Holding Inc shares rose 8.6% to $44.38 after announcing plans to acquire American Medical Systems Holdings Inc, a urological medical devices supplier.
American Medical Systems shares jumped 32.1% to $29.50.
The Dow Jones industrial average was up 36.44 points, or 0.29%, at 12,416.49. The Standard & Poor’s 500 Index was up 3.23 points, or 0.24%, at 1,331.40. The Nasdaq Composite Index was up 6.53 points, or 0.23%, at 2,786.95.
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First Published: Tue, Apr 12 2011. 10 18 AM IST
More Topics: US | Stocks | Wall Street | Alcoa | UBS |