Stocks Move Higher on Upbeat Earnings, Forecasts
NEW YORK (AP) — Stocks opened higher Friday after several companies reported solid earnings and upbeat forecasts. Technology companies and consumer-focused companies were leading the gains.
Optimism over economic growth is boosting industrial and energy companies, along with makers of basic materials.
KEEPING SCORE: The S&P 500 index rose 23 points, or 0.9 percent to 2,666 as of 10:10 a.m. Eastern time. The Dow Jones Industrial Average rose 244 points, or 1 percent, to 24,798. The Nasdaq composite rose 70 points, or 1 percent, to 7,143. The Russell 2000 index of smaller company stocks rose 10 points, or 0.7 percent, to 1,473.
MIXED TECH: Hard drive maker Western Digital jumped 8.9 percent to $43.70 after the company's upbeat guidance overshadowed a weaker-than-expected fourth quarter.
Competitor Seagate Technology also gained ground as Western Digital's results gave investors an optimistic view on improving demand in the sector. The stock gained 5.9 percent to $43.40.
Those gains outweighed disappointing quarterly results and a weak outlook from the world's largest chipmaker, Intel. The company is also still without a permanent CEO, following Brian Krzanich's resignation in June. Shares fell 6.2 percent to $46.66.
FED CAUTION: The Wall Street Journal is reporting that the Federal Reserve might soon halt the shrinking of its bond portfolio. The Fed bought trillions of dollars in bonds following the recession in 2008 to help keep interest rates low and aid an economic recovery. It started gradually letting its portfolio shrink recently, but investors are concerned that will tighten credit conditions, which could slow economic growth.
CAFFEINE RUSH: Starbucks shares jumped 3.8 percent to $67.20 after the company reported revenue and profit growth with the help of a strong holiday season. The results topped expectations and the company gave an upbeat outlook for the year.
LOSERS: Drugmaker Abbvie fell 6.8 percent to $80 after the maker of anti-inflammatory drug Humira reported disappointing fourth-quarter results.
OVERSEAS: France's CAC 40 rose 0.9 percent, while Germany's DAX gained 1.4 percent. Britain's FTSE 100 fell 0.3 percent, Japan's benchmark Nikkei 225 rose 1.0 percent, South Korea's Kospi surged 1.5 percent and Hong Kong's Hang Seng gained 1.6 percent.
ENERGY: U.S. crude oil rose 0.5 percent to $53.39 a barrel in New York. Brent crude, used to price international oils, rose 0.3 percent to$61.28 in London.
CURRENCIES: The dollar edged up to 109.59 yen from 109.53 yen. The euro rose to $1.1393 from $1.1389.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.75 percent from 2.71 percent.
By AP reporter Damian J. Troise