US Stocks Move Higher as Companies Report Solid Profits
NEW YORK (AP) — Stocks moved broadly higher in early trading on Wall Street Wednesday as large U.S. companies continued to surprise investors with solid profits.
Earnings reporting season is more than a third of the way through and the results have been tempering investors' worst fears about a severe profit slump. Earnings are down about 0.3% so far for S&P 500 companies. That's far better than the 4% drop expected just a few weeks ago.
Technology giant Apple beat forecasts, despite another quarter of slumping revenue as it struggles with iPhone sales. Chipmaker Advanced Micro Devices also beat forecasts. The solid results helped lift the broader technology sector.
Profit surprises by Johnson Controls and Harris lifted industrial stocks. Banks and financial companies also led the gainers.
Health care stocks were dragged down by drugmaker Amgen after it gave investors solid profit results but reported a surge in costs and falling sales of its cancer drug Neulasta.
Safe-play sectors like utilities also fell.
Traders will get to hear from The Federal Reserve later Wednesday, when the central bank's policymakers issue another update on interest rate policy and their view on the U.S. economy.
KEEPING SCORE: The S&P 500 index rose 0.1% as of 10 a.m. The Dow Jones Industrial Average rose 0.1%, or 41 points, to 26,631. The Nasdaq composite rose 0.4%.
APPLE BEAT: Apple rose 5.3% after its first quarter results beat Wall Street forecasts. Apple's sales are still shrinking as iPhone demand weakens, however. Revenue fell 5%, marking the second consecutive revenue decline in two and a half years. The company raised its dividend and signaled that the revenue slide could level off in the current quarter.
CRUISING ALONG: Cruise line operator Royal Caribbean Cruises rose 4.5%. The company said booking rates and volumes helped push revenue higher, along with more demand for onboard activities. The company did warn investors that damage to a ship from a crane accident in the Bahamas will shave about 25 cents per share from its full-year profit forecast.
HEALTHY COVERAGE: CVS Health jumped 5.9% after the company reported a 42% surge in quarterly profits, blowing past Wall Street's forecasts. The company also raised its profit forecast for the year.
The nation's second-largest drugstore chain bought health insurer Aetna late last year for $69 billion. That investment seems to have paid off. The Aetna deal gave CVS a new line of business with 23 million customers.
By AP reporter Damian J. Troise