Hopes for earnings see Wall Street rise
WALL Street stocks rose yesterday amid signs the global economy was recovering and optimism that corporate earnings reports will beat expectations.
The economic optimism spurred gains in energy and other commodities, lifting shares of oil and resource companies. Shares of Exxon Mobil rose 1.6 per cent to $68.66 and were among the top gainers on the Dow.
Expectations of a rebound in revenues and earnings for the recently ended third quarter fed the optimism. Quarterly earnings are due to kick off tonight, with results from aluminium company Alcoa. Its shares were up 3.5 per cent to $13.89.
The Dow Jones industrial average was up 131.50 points, or 1.37 per cent, at 9,731.25. The Standard & Poor’s 500 index was up 14.26 points, or 1.37 per cent, at 1,054.72. The Nasdaq Composite index was up 35.42 points, or 1.71 per cent, at 2,103.57.
It was the market’s second day of gains, after marking its second week of losses on Friday. The S&P 500 is now up about 56 per cent since hitting 12-year lows in early March.
“I think expectations going into the quarter are for a fairly positive earnings season. Last quarter about 70 per cent of companies beat estimates on the heels of aggressive cost cutting and very weak consensus estimates,” said Michael Sheldon, chief market strategist at RDM Financial.
Benchmark US gold futures scaled an all-time high at $1,045 an ounce, adding to gains in commodity-related shares. Freeport-McMoRan Copper & Gold advanced 3.4 per cent at $69.61.
Shares of industrial companies sensitive to the economy’s cycles also rose. Shares of United Technologies, the world’s largest maker of elevators and air conditioners, climbed 1.8 per cent at $61.49.
On Nasdaq, Microsoft increased 1.9 per cent to $25.11 after introducing new software for mobile phones to compete with Apple’s iPhone. Apple shares rose 2.1 per cent at $190.01.
Volume was below average on the New York Stock Exchange, with 1.23bn shares changing hands, under last year’s estimated daily average of 1.49bn, while on the Nasdaq, about 2.42bn shares traded, above last year’s daily average of 2.28bn.