BackWall Street climbs 1% on results; Dow above 14,000
The market’s bounce follows a sell-off on Monday; Dell up 1.3% after deal talks
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New York: US stocks climbed on Tuesday, pushing the Dow above 14,000 a day after the market’s biggest sell-off since November, as stronger-than-expected earnings brightened the profit picture.
All 10 S&P sectors were higher, and the S&P 500 and the Nasdaq gained more than 1%.
Dell Inc.’s stock rose after the world’s No. 3 computer maker agreed to be taken private in a $24.4 billion deal, the largest leveraged buyout since the 2008-2009 financial crisis. The stock gained 1.3% to $13.44 after a delayed open.
The market’s bounce follows a sell-off on Monday that gave the S&P 500 its biggest percentage decline since mid-November. Still, the benchmark is up about 5% since the start of the year and is less than 5% away from its all-time intraday high of 1,576.09 in October 2011.
Analysts said fourth-quarter results have been among the positives for the market. On Tuesday, Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 3.4% to $29.40.
“This quarter was one that had relatively low expectations coming into it, but the beats on the earnings and on the revenue side have been pretty good, particularly on the revenue side," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
“And in the aggregate so far, the earnings growth is just under 5%, and that’s relieved those who thought maybe the earnings picture was deteriorating to the point where we would see surprisingly poor earnings."
The Dow Jones industrial average was up 121.49 points, or 0.88%, at 14,001.57. The Standard and Poor’s 500 Index was up 16.95 points, or 1.13%, at 1,512.66. The Nasdaq Composite Index was up 40.79 points, or 1.30%, at 3,171.96.
Also in earnings, Estée Lauder Cos Inc reported a higher quarterly profit and raised its full-year profit forecast. The stock rose 5.7% to $64.52.
With results in for more than half of the S&P 500 companies, 69% have beaten profit expectations, compared with the 62% average since 1994 and the 65% average over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are expected to rise 4.5%, according to the data, above the 1.9% forecast at the start of earnings season.
On the down side, McGraw-Hill shares slumped 7.5% to $46.51 after the Justice Department filed a civil lawsuit against it seeking $5 billion over mortgage bond ratings. Standard & Poor’s, a McGraw Hill unit, was accused of inflated ratings and understated risks out of a desire to gain more business from investment banks.
On Monday, the stock market suffered its worst one-day decline since the 1987 market crash.
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