Earnings, Economic Reports Boost Stocks
U.S. stocks rose, propelling the Standard & Poor's 500-stock index to its biggest weekly gain since March, as Goldman Sachs Group and Intel beat analysts' estimates and reports on manufacturing and retail sales signaled the economy is improving.
Goldman Sachs surged 11 percent to its highest price since September as it reported a record profit of $3.44 billion. Also, analyst Meredith Whitney gave the bank the only "buy" rating among eight companies she covers. Intel, the world's biggest chipmaker, added 17 percent and completed a seven-day rally as it reported twice as much profit as analysts forecast.
The S&P 500 rose 7 percent, to 940.38, for its steepest advance since the week ended March 13. The Dow Jones industrial average jumped 597.42 points, or 7.3 percent, to 8743.94. The Nasdaq composite index climbed 7.4 percent, to 1886.61.
"We're bullish," said Scott L. Wren, senior equity strategist at Wells Fargo Advisors in St. Louis. "Between now and the end of 2010, we're looking for the market to be up at least 25 percent."
The S&P 500 added 61.25 points last week, almost erasing the 67.08-point retreat from the four previous weeks, as Goldman Sachs, Intel and Johnson & Johnson helped allay concern that equities had risen faster than the outlook for corporate profits. S&P 500 companies that have reported second-quarter results since July 8 topped estimates by 16 percent, according to data compiled by Bloomberg. Thirty out of 38 beat projections.
Almost 150 companies in the S&P 500 are scheduled to report results this week, including Apple, Coca-Cola, McDonald's, Microsoft and Morgan Stanley. Analysts estimate that profits fell 33 percent in the second quarter and will drop 20 percent in the current period.
-- Bloomberg News