Publications
Partners
NEW YORK, Oct 16 - U.S. stocks rallied on Tuesday, giving the S&P 500 its best two-day advance in a month as strong earnings from Johnson & Johnson and other bellwether companies raised hopes for the rest of the U.S. reporting season.
Diversified U.S. healthcare company Johnson & Johnson also increased its full-year profit outlook. Its stock rose 1.4 percent to $69.55, helping the Dow Jones industrial average register its best day since Sept. 13, when the Federal Reserve unveiled its third round of stimulus, or quantitative easing, known as "QE3."
Goldman Sachs earnings also beat expectations, its revenue more than doubled and it raised its quarterly dividend. But it earned less money from customers' trading, and the stock lost 1 percent to $123.22.
Goldman's results followed upbeat earnings from Citigroup Inc in the previous session. Shares of Citigroup jumped 1.6 percent to $37.25 on Tuesday after the surprising resignation of Chief Executive Officer Vikram Pandit. An S&P financial-sector index rose 0.7 percent.
The reports were among a flood of results from 80 S&P 500 companies as the third-quarter earnings season picks up the pace. A spate of corporate warnings heading into the period raised worries that slower growth in Europe and China may be affecting corporate America more than previously thought.
"Financials have proven to be fairly good, and that has given the market a second push this week, compared to declines last week," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.
"There may be a push upwards, depending on results, but we'll be waiting until economic indicators improve."
Overall S&P 500 companies' quarterly earnings still are expected to decline 2.3 percent from a year ago, but the forecast does mark a slight improvement from estimates last week, according to Thomson Reuters data.
The Dow Jones industrial average jumped 127.55 points, or 0.95 percent, to close at 13,551.78. The Standard & Poor's 500 Index advanced 14.79 points, or 1.03 percent, to finish at 1,454.92. The Nasdaq Composite Index rose 36.99 points, or 1.21 percent, to end at 3,101.17.
The S&P 500 has gained 1.8 percent in the last two days, rebounding from last week's slide of 2.2 percent. That was the benchmark index's worst week in four months.
After the bell, shares of International Business Machines Corp fell 3.3 percent to $204.10 f ollowing the release of its results. IBM closed at $211, up 1 percent.
Shares of Intel Corp also declined after the bell. Intel slipped 1.5 percent to $22.02 after the world's largest chipmaker forecast gross margins for the current quarter below expectations.
During the regular session, Coca-Cola Co shares slipped 0.6 percent to $37.90 after it reported a rise in earnings. The world's biggest soft drinks maker reported quarterly revenue that was short of Wall Street's expectations, hurt by declines in Europe and Asia.
Among other earnings reports, U.S. insurer UnitedHealth reported a higher-than-expected quarterly profit, but it gave a cautious outlook. Its shares fell 1.1 percent to $56.88.
Economic data showed the overall U.S. Consumer Price Index rose 0.6 percent in September as the cost of gasoline surged, posing a threat to consumers' spending power. On the other hand, inflation pressures looked unlikely to derail the Federal Reserve's ultra-easy policy path. Excluding volatile food and energy prices, core CPI was up 0.1 percent - less than the forecast for a gain of 0.2 percent.
Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.51 billion.
Advancers outnumbered decliners on the NYSE by a ratio of slightly more than 3 to 1. On the Nasdaq, about two stocks rose for every one that fell.
