Strong Earnings Lift Stock Prices
Stocks ended mostly higher Tuesday as earnings reports again took center stage.
Disappointment over chemical giant DuPont’s quarterly results sent its shares down $2.89 to $41.15 and weighed on the 30-stock Dow Jones industrial average, which lost 16.71 points, or 0.2%, to 10,579.77.
But most broader indexes posted gains, and winners outnumbered losers by about 4 to 3 on the New York Stock Exchange and on Nasdaq.
Strong earnings reports lifted companies in such sectors as technology, aerospace, candy and engineering.
The Standard & Poor’s 500 index was up 2.13 points, or 0.2%, to 1,231.16, edging back toward the four-year high of 1,235.20 it reached a week ago.
The Nasdaq composite rose 9.25 points, or 0.4%, to 2,175.99. It also hit a four-year high a week ago, at 2,188.57.
Stocks couldn’t gain much altitude Tuesday in part because of some downbeat economic news, analysts said. The Conference Board said its index of consumer confidence this month slipped to 103.2 from 106.2 in June.
“You might be in the range here where oil prices and gasoline prices do start to make a difference” to consumers, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vt.
Crude oil prices were up Tuesday for a fourth session, with near-term futures in New York rising 20 cents to $59.20 a barrel, the highest since July 13.
Some traders said there also was concern that China on Tuesday downplayed the idea of further revaluation of its currency. In a surprise Thursday, China allowed the yuan to rise slightly against the dollar. That raised hopes that U.S. exports might become cheaper in China over time, boosting sales.
At the same time, a stronger yuan could mean higher prices on Chinese exports.
The dollar, which slumped against the yen and other currencies last week after China’s announcement, continued to climb back. It rose to 112.35 yen from 111.50 on Monday.
In the bond market yields were little changed. The 10-year Treasury note ended at 4.23%, down from 4.25% on Monday.
The Treasury sold $6 billion of 20-year inflation-protected bonds and saw stronger demand than traders had expected. The bonds were sold at a yield of 2.09%. They also earn an adjustment each year for inflation.
On Wall Street, bullish analysts said the stock market would continue to draw strength from second-quarter earnings reports.
Earnings “are pretty positive right now,” said Bart Barnett, head of trading at Morgan Keegan & Co. in Memphis, Tenn. “We have seen equities do very well here.”
Also, the government’s report Friday on second-quarter gross domestic product growth will give more clues as to the economy’s strength coming into the current quarter, analysts said.
Among Tuesday’s market highlights:
* Better-than-expected profit numbers boosted chip maker Texas Instruments $1.70 to $32.30. An upbeat outlook from Texas Instruments, whose processors run more than half the mobile phones sold last year, also lifted other chip firms. El Segundo-based International Rectifier gained $1.69 to $55.82, National Semiconductor was up 54 cents to $24.81 and Intel rallied 37 cents to $26.89.
* Defense giant Lockheed Martin jumped $1.48 to $63.99 on its profit report. Boeing added 30 cents to $66.35 and Raytheon was up 57 cents to $39.82.
* Other stocks rising on earnings news included gum maker Wrigley, up $2.22 to $71.60, and Pasadena-based Jacobs Engineering, up $3.22 to a record high of $59.22.
* Avaya soared $1.51 to $10.74, for the biggest rally in the S&P; 500. The No. 1 U.S. maker of office-telephone equipment said that excluding some items, net income last quarter was 14 cents a share, beating the 12-cent Thomson Financial estimate.
* On the downside, footwear maker Timberland tumbled $4.58 to $35.18 after reporting lower quarterly results and warning of a “challenging” third quarter because of rising competition.
* DuPont’s profit report may have hurt other commodity-related issues. Mining firm Inco fell $1.30 to $41, Nova Chemicals lost $1.60 to $33.75 and Dow Chemical sank 89 cents to $47.02.
* Real estate investment trust shares attracted buyers, lifting a Bloomberg index of 147 REIT stocks 0.9% to a record high. Winners included General Growth Properties, up 86 cents to $45.21; AvalonBay Communities, up 86 cents to $87.16; and Kimco Realty, up $1.17 to $63.15.
* In the biotech sector, Genitope plunged $3.41 to $8.80. The company said it needed to keep testing its experimental lymphoma treatment before seeking U.S. approval.
* Wells Fargo added 16 cents to $62. The banking firm raised its quarterly dividend 8.3%, to 52 cents a share, and said it would increase its stock buyback program by up to 25 million shares.
* Netflix, the largest mail-order movie-rental service, surged $2.05 to $19.01. The company late Monday reported earnings well above expectations.
