Bourse

Bourse

US, European stock markets up

20 October 2009 07:32 (UTC +04:00)

Baku- APA-Economics. Investors found a fresh appetite for stocks Monday after a handful of earnings reports revived hopes that the economy is improving, AP reported.
Industrial equipment maker Eaton Corp. said it was seeing improvement in key markets and raised its full-year profit forecast. Newspaper publisher Gannett Co. managed to post a profit despite a sharp fall in revenue, and toymaker Hasbro Inc.’s income rose on cost cuts.
As earnings reporting gets into full swing this week, investors are relieved to see better results in a broad range of industries following some downbeat news last week from major banks, which reported deepening loan delinquencies as consumers and businesses continue to struggle with paying off their debts.
Technology earnings have come in relatively well so far, with solid reports last week from Google Inc. and leading chipmaker Intel Corp. The market will get a chance to see if that trend will continue after the market closes Monday with reports from Apple Inc. and Texas Instruments Inc.
Burt White, chief investment officer at LPL Financial in Boston, noted that three of every four companies so far has topped analysts’ expectations for earnings in the July-September quarter. White says that’s a sign that the economy is doing better than most investors had predicted.
"The recovery is moving faster than analysts can sharpen their pencils and revise their estimates upward," he said.
In late afternoon trading, the Dow Jones industrial average rose 108.75, or 1.1 percent, to 10,104.66, its highest level since Oct. 7 last year.
The broader Standard & Poor’s 500 index rose 11.38, or 1.1 percent, to 1,099.06 and traded above 1,100 for the first time in a year.
The Nasdaq composite index rose 19.20, or 0.9 percent, to 2,176.00.
The yield on the benchmark 10-year Treasury note fell to 3.40 percent from 3.42 percent late Friday.
Investors grew hopeful that Federal Reserve policymakers would be able to withdraw some of the money supporting the economy as conditions improved. That could help prevent inflation, which has become a concern in the markets because of the huge amounts of money the government has pumped into the financial system.
The New York Federal Reserve, which carries out the central bank’s market operations, said in a statement that it has been preparing plans for how it could begin weaning the economy from monetary stimulus.
The dollar mostly fell against other major currencies, while gold prices rose. The ICE Futures U.S. dollar index, which tracks the dollar against other major currencies, fell 0.3 percent.
Light, sweet crude rose $1.08 to settle at $79.61 per barrel on the New York Mercantile Exchange.
Among companies posting earnings, Eaton rose $3.84, or 6.4 percent, to $64.26, while Gannett advanced $1.04, or 8 percent, to $14.04. Hasbro fell $1.04, or 3.5 percent, to $28.48.
Apple fell 70 cents, or 0.4 percent, to $187.35 ahead of its quarterly report. Texas Instruments rose 55 cents, or 2.4 percent, to $23.30.
Bob Jergovic, chief investment officer at CLS Investments in Omaha, Neb., said investors are now trying to determine whether a recovery in corporate profits will continue and, if so, whether that will help the overall economy if companies are more willing to hire and make investments.
"We’re in that phase where the market has really got to sort it out," he said. "Can we make that handoff from a profit recovery to an economic recovery?"
Three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 733.2 million shares compared with 908.8 million traded at the same point Friday.
The Russell 2000 index of smaller companies rose 7.04, or 1.1 percent, to 623.22.
Overseas, Japan’s Nikkei stock average fell 0.2 percent. Britain’s FTSE 100 rose 1.8 percent, Germany’s DAX index rose 1.9 percent, and France’s CAC-40 advanced 1.7 percent.