Stocks surge on upbeat earnings, forecasts
Trader John Bowers works on the floor of the New York Stock Exchange. (July 15, 2010) Credit: AP
Stocks had their biggest rally in two weeks Thursday as earnings and economic reports reassured investors that the recovery, while uncertain, is continuing.
The Dow Jones industrial average rose more than 200 points after second-quarter earnings from Caterpillar Inc., UPS Inc. and other companies beat analysts' forecasts. A better-than-expected report on housing and encouraging signs of growth in Europe added to the upbeat mood.
But investors might be ready to sell again when trading resumes Friday. After the close of regular trading, Amazon.com Inc. issued a report that fell short of expectations. Its stock fell almost 13 percent in after-hours trading, to $104.50. If the market gives back gains today, it would follow its pattern of falling on disappointments in what so far has been a mixed earnings season.
Microsoft Corp. also released earnings after the close of trading and beat analyst estimates. Its stock fell slightly.
Investors had plenty of reasons to buy yesterday. Caterpillar said its orders are growing and production will pick up in the second half of the year. UPS raised its outlook because of spending by businesses.
A report on the housing market, while still showing a slowdown, was reassuring because it wasn't as bad as investors expected.
The Dow rose 201.77, or 2 percent, to 10,322.30. That was the index's biggest advance since it rose 274 points on July 7. The Standard & Poor's 500 index rose 24.08, or 2.3 percent, to 1,093.67, while the Nasdaq composite index rose 58.56, or 2.7 percent, to 2,245.89.- AP
