Stocks rise as investors assess earnings
NEW YORK (AP) — Stocks rose Thursday as investors assessed the latest corporate earnings. Goodyear Tire & Rubber and CBS rose after reporting strong earnings gains. That helped offset weak economic reports on the job market and retail sales.
Major indexes shrugged off an early decline and moved steadily higher throughout the day. The Standard & Poor’s 500 index was up 10 points, or 0.5 percent, to 1,829 as of 3:09 p.m. Eastern time. The Dow Jones industrial average climbed 72 points, or 0.5 percent, to 16,036. The Nasdaq composite rose 34 points, or 0.8 percent, to 4,236.
Goodyear Tire & Rubber surged $2.80, or 11.6 percent, to $26.97, after the company’s fourth-quarter earnings beat Wall Street estimates Thursday. Strong sales in the company’s core North American market helped the tire maker.
CBS rose $2.89, or 4.6 percent, to $64.71 after reporting fourth-quarter earnings and revenue growth that beat Wall Street’s expectations. Advertising revenue was flat, but there was growth in content licensing thanks to the sale of shows such as “Hawaii Five-O” for domestic reruns.
Stocks fell immediately after the opening bell after two weak economic reports. The number of people seeking U.S. unemployment benefits rose 8,000 last week to 339,000, evidence that layoffs ticked up. Economist had forecast claims of 330,000.
A separate report showed that cold weather caused U.S. retail sales to drop in January as Americans spent less on autos and clothing and at restaurants during a brutally cold month. The Commerce Department says retail sales fell 0.4 percent last month, the second straight decline after a 0.1 percent drop in December.
The biggest gains in the S&P 500 were posted by utility companies. Gains in these stocks suggest investors are looking to play it safe. Utilities don’t have the best growth prospects, but they pay steady dividends and operate in stable industries.
Cisco Systems fell 83 cents, or 3.6 percent, to $22.02, after the company reported late Wednesday that weaker revenue and special charges weighed down its second-quarter earnings.
Whole Foods dropped $4.27, or 7.7 percent, to $51.48 after the grocery chain reported fiscal first-quarter profit and revenue that came in below analysts’ forecasts. The company, known for its organic and natural food offerings, also lowered its earnings projections for the year again as the company faces more and more competition.
Stocks have struggled this year after surging to record levels last year. The S&P 500 is down 1.1 percent so far this year, and may yet fall further as investors pare back their optimism after last year’s big gains, says Chris Bertelsen, Chief Investment Officer at Global Financial Private Capital.
“I don’t think we’ve seen the lows of the year,” said Bertelsen. “You’d blow me over with a feather if we see a year that ends up more than seven, eight or nine percent.”
Comcast fell $2.04, or 3.7 percent, to $53.20 after it agreed to buy Time Warner Cable for $45.2 billion in stock. The deal would combine the top two cable TV companies in the United States. Time Warner’s stock jumped $9.68, or 7.6 percent, to $144.95.
In government bond trading, the yield on the 10-year note fell to 2.73 percent from 2.79 percent on Wednesday. The price of oil was little changed at $100.35 a barrel. Gold gained $5.10, or 0.5 percent, to $1,300.10 an ounce.