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US market gains on FedEx outlook, tech strength

US market gains on FedEx outlook, tech strength
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First Published: Fri, Dec 17 2010. 11 40 AM IST
Updated: Fri, Dec 17 2010. 11 40 AM IST
New York: US stocks, bucking a trend of late-day selloffs, ended higher on Thursday as economic bellwether FedEx offered a bullish profit outlook that augured well for broad growth.
Stocks that performed well in 2010 were among Thursday’s biggest gainers as investors sought to boost returns by the year’s end. Advancing stocks outnumbered decliners by more than two to one on both the New York Stock Exchange and Nasdaq.
Package shipper FedEx Corp raised its full-year outlook, though its quarterly profit and revenue missed expectations. Shares rose 2% to $94.22 while larger rival United Parcel Services gained 2.1% to $73.76 and the Dow Jones Transportation Average gained 1.3%.
“The fact that FedEx missed its earnings is overshadowed by its very strong outlook, which is a good indicator that we’re looking for good economic times ahead,” said Kimberly Foss, president at the Sacramento, California-based Empyrion Wealth Management, which has more than $200 million in assets under management.
Visa Inc and MasterCard Inc tumbled on heavy volume after the Federal Reserve issued a proposal that would force banks and card networks to slash the fees they charge retailers on debit cards. Visa sank 13% to $67.19 while MasterCard slumped 10% to $223.49.
The Dow Jones industrial average was up 41.78 points, or 0.36%, at 11,499.25. The Standard & Poor’s 500 Index was up 7.64 points, or 0.62%, at 1,242.87. The Nasdaq Composite Index was up 20.09 points, or 0.77%, at 2,637.31.
Stocks gained momentum after a slow start to the day, with big gainers for the year boosting the Nasdaq.
Intuit Inc, known for its tax-filing software, gained 3% to $49.35 after rising about 60% for the year.
Some shares raised hopes consumers will be less frugal over the holiday shopping season. Amazon.com Inc rose 1.4% to $178.10 and its stock was up 32% for the year.
After the closing bell, Oracle Corp reported a surge in new software sales in its second quarter, lifting its shares 3.2% to $31.24.
Starbucks Corp rose 2.3% to $32.59 after Goldman Sachs gave the coffee chain a “conviction buy” rating with a $44 price target.
Economic data added to the positive mood. Factory activity in the US mid-Atlantic region unexpectedly rose in December, while jobless claims dipped for a second week. November housing starts rose, but permits for future home construction dropped to a 1-1/2 year low.
US-listed shares of Research in Motion rose 1.8% to $60.28 after it reported its third-quarter results after the close.
“While we expect the market to continue growing, the slower growth we expect is going to be good for those companies that execute well, but challenging for the ones that have been struggling,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Virginia.
About 7.54 billion shares were traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, well below the year’s daily average of 8.62 billion.
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First Published: Fri, Dec 17 2010. 11 40 AM IST
More Topics: Markets | US stocks | Share market | FedEx | Investors |