Stocks rise in early trading, boosted by earnings
- Article by: STEVE ROTHWELL
- Associated Press
- May 7, 2013 - 9:30 AM
NEW YORK - Stocks edged higher in early trading on Wall Street Tuesday, putting the Dow Jones industrial average back above 15,000.
Markets are trading at record levels on optimism that the U.S. economy is continuing to recover and as the Federal Reserve maintains its stimulus program. The Standard and Poor's 500 index broke through 1,600 on Friday for the first time and is up 13.5 percent this year. The Dow is 14.4 percent higher.
Healthy profits at major U.S. corporations are also driving the market higher. More than 80 percent of companies in the S&P 500 index have reported their first quarter-earnings, and profits are at a record level.
Of companies that have reported earnings, almost 70 percent have beaten the expectations of Wall Street analysts for income, according to S&P Capital IQ data. Wall Street analysts expect earnings to rise 5 percent for the first quarter and to keep on climbing throughout the year. However, sales growth has looked weak. Six out of every 10 companies have fallen short of revenue forecasts.
Fossil, a maker of watches and handbags, was among companies reporting earnings Tuesday. The stock leapt $8.39, or 8.5 percent, to $107.35 after the company said its earnings rose 24 percent on higher sales. DirecTV, the country's largest provider of satellite TV services, rose $2.04, or 3.5percent, to $60 after its earnings beat analysts' expectations following subscriber growth in the U.S. and Latin America.
The Dow was up 15 points at 14,985, as of 10:16 a.m. Eastern Daylight Time, an increase of 0.1 percent. It edged back above 15,000 shortly after the opening bell. The Dow first crossed above 15,000 on Friday after the U.S. government reported a sharp pickup in hiring last month.
The S&P 500 index gained a point to 1,618, or 0.07 percent. The Nasdaq composite edged down five points to 3,387, a loss of 0.2 percent.
In government bond trading, the yield on the 10-year U.S. Treasury note climbed to 1.78 percent from 1.76 percent Monday. The yield has risen this week after going as low as 1.63 percent last week, its lowest level of the year. The rising yield means demand is slipping for low-risk U.S. government debt as traders shift money into riskier assets like stocks.
The price of crude oil fell $1 to $95.15 a barrel in New York, and the price of gold was down $26, or 1.8 percent, to $1,441. The dollar was lower against euro and the Japanese yen.
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