US stocks mount strong rebound on company earnings
By ALEX VEIGA
the associated press | July 19,2014
Trader Dudley Devine, center, works on the floor of the New York Stock Exchange, Friday. U.S. stocks are opening higher after Google, Honeywell and other big companies report their quarterly results.
Investors jumped on a wave of strong corporate financial results Friday, propelling stocks higher for the third time in five days.
The gains wiped out much of the market’s losses from the day before, when the downing of a Malaysian Airlines passenger jet in eastern Ukraine stirred concerns that tensions between Russia and the West could escalate. Israel’s launch of a ground offensive into Gaza also stoked geopolitical uncertainty.
Those worries appeared to ease Friday, as world leaders called for an immediate cease-fire in the region and international attention turned toward the task of determining what led to the aircraft being shot down. Investors turned their attention to the latest encouraging company earnings.
“Typically when these events hit the news, it’s kind of a sell-now, ask-questions-later moment, and then there is a reassessment, and that’s exactly what we had,” said Quincy Krosby, market strategist at Prudential Financial. “Today, the market focused again on earnings, which for the most part were good, surprising to the upside, and the markets just basically got back to their normal business.”
Signs of a rebound appeared early. The major stock indexes edged higher in premarket trading and demand for bonds waned, sending the yield on the 10-year Treasury note lower. Gold and oil prices also declined.
Strong earnings from several companies kept the market in positive territory after it opened. Investors drove up shares in Google, Honeywell International, furniture company Knoll and Huntington Banchsares, among others.
The Conference Board’s latest index of leading indicators, designed to predict the economy’s trajectory, stoked the market further. The index climbed in June for the fifth consecutive month. At the same time, investors brushed off a preliminary report showing consumer confidence dipped slightly.
The market built steadily on its gains throughout the day, reversing nearly all of the prior day’s losses and putting all three major U.S. indexes into the green for the week.
The Standard & Poor’s 500 index added 20.10 points, or 1 percent, to 1,978.22. The Dow rose 123.37 points, or 0.7 percent, to 17,100.18. The Nasdaq composite gained 68.70 points, or 1.6 percent, to 4,432.15.
The three major indexes remain ahead for the year.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.48 percent from 2.45 percent late Thursday.
All 10 sectors in the S&P 500 rose, led by health care. The sector is up 10.6 percent this year.
Gilead Sciences notched the biggest gain among the 500 companies in the index, rising $4.12 or 4.8 percent, to $89.19. NVIDIA fell the most, shedding 86 cents, or 4.5 percent, to $18.44.
Investors largely looked through the brewing geopolitical hot spots this week in part because company earnings have been favorable, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“Clearly the equity market remains remarkably resilient,” he said. “Despite heightened political issues on the horizon the path of least resistance for equities is still up.”