Markets Rise on Earnings, Durable Goods Data
Friday, April 24, 2009; 4:30 PM
Investors gave a sigh of relief today after earnings reports from Ford and American Express and durable goods data all beat expectations.
The data helped prop up stocks. The blue-chip Dow Jones industrial average was up 1.5 percent or 119 points to close at 8076, while the broader Standard & Poor's 500-stock index gained 1.7 percent or 14 points to 866. The tech-heavy Nasdaq composite index climbed 2.6 percent, or 42 points to 1694.
But after a few days of rocky trading, the Dow and S&P were down slightly for the week, less than 1 percent, breaking a nearly two-month winning streak. The Nasdaq was up 1.3 percent for the week.
Investors have been watching for signs that parts of the economy are stabilizing or at least not deteriorating as quickly. That was bolstered today by a Commerce Department report showing that durable goods orders slipped 0.8 percent last month, better than the 1.5 percent drop many analysts were expecting. Durable goods orders are used by economists as an key indicator of future factory sales.
New home sales also beat expectations, falling 0.6 percent to a seasonally adjusted annual rate of 356,000 in March, according to the Commerce Department. Sales are down 30.6 percent compared with the same period a year ago. The median home price fell to $201,400, compared with $229,300 during March 2008.
"Underneath the surface, the data suggests that we are seeing stabilization of the economy," said Michael T. Darda, chief economist for MKM Partners. "Stabilization is a pre-text to recovery, so this is still important."
Stocks were also boosted by better-than-expected earnings results from Ford. The auto company said that it lost $1.4 billion during its first quarter but that it still doesn't need government aid. The company's stock was up 11.4 percent.
American Express's stock jumped 20.7 percent after the company reported a 63 percent drop in first-quarter earnings, which topped analysts' expectations. It had the biggest gains on the Dow.
Crude oil prices surged nearly 4 percent to above $51 a barrel, helping elevate energy stocks. ConocoPhillips and Chevron were up 3.2 percent and 1.6 percent, respectively. Exxon Mobil was up 1.3 percent.
Overseas markets were mixed. Stocks in Europe, London's FTSE and the Dax in Germany, were up 3 percent or more. But Japan's Nikkei fell more than 1.5 percent.