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Published: 7/8/2013

Stocks gain ahead of corporate earnings kickoff

ASSOCIATED PRESS
Specialists Michael O'Connor, Peter Giacchi, and Douglas Johnson, foreground left to right, work at the post that handles Sprint on the floor of the New York Stock Exchange today. Specialists Michael O'Connor, Peter Giacchi, and Douglas Johnson, foreground left to right, work at the post that handles Sprint on the floor of the New York Stock Exchange today.
ASSOCIATED PRESS Enlarge

NEW YORK — The stock market is rising today, ahead of the start of earnings season and on increasing confidence that the economy can support profit growth for U.S. companies.

Aluminum producer Alcoa, the first company in the Dow to announce earnings, will report its second-quarter results after the market closes. Banks JPMorgan and Wells Fargo are also among companies that will report earnings this week.

Record earnings helped push the stock market to a record high in May. Like in the first quarter, investors and traders will look for evidence that companies are increasing revenues, not just cutting costs to boost profits.

“We’ll be looking to see where revenue comes in,” said Jim Dunigan, an executive vice president of investments at PNC.

Analysts forecast that corporate earnings rose 3 percent in the second quarter, compared with 1 percent a year earlier, according to data from S&P Capital IQ. Sales growth is predicted to fall 0.3 percent this quarter.

The Dow Jones industrial average rose 79 points, or 0.7 percent, to 15,236.90, as of 11:42 a.m. The Standard & Poor’s 500 index gained eight points, or 0.5 percent, to 1,640. The Nasdaq composite rose two points, or 0.1 percent, to 3,481.

Eight of 10 industry groups in the S&P 500 rose, led by energy companies.

In government bond trading, the yield on the 10-year government note pulled back from a two-year high of 2.74 Friday. It fell to 2.67 percent today.

The yield had jumped after the government reported strong hiring for June on Friday. Investors believe that the improving jobs market will prompt the Federal Reserve to ease back on its bond buying program. The Fed is buying $85 billion in bonds each month to keep interest rates low and spur borrowing and investing.

In commodities trading, the price of oil was little changed at $103.18 a barrel. The price of gold rose $22.50, or 1.9 percent, to $1,235.20 an ounce.

Among stocks making big moves today:

Dell rose 37 cents, or 2.8 percent, to $13.40 after an advisory firm recommended that company shareholders vote to allow Dell’s founder and an investment firm to take the computer company private. Michael Dell and Silver Lake Partners have offered to buy Dell for $13.65 a share, for a total price of $24.4 billion.

Priceline rose $23.84, or 2.8 percent, to $878.50 after investment bank Morgan Stanley raised its price target for the online bookings company. Analysts at the bank believe that Priceline can climb as high as $1,010 as it continues to grow internationally and worries about shrinking profits dissipate.

Alcoa rose 7 cents, or 0.9 percent, to $7.88. The Aluminum producer is scheduled to report its second-quarter earnings after the closing bell today.



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