Earnings Reports Give Stocks a Lift

Sunday, October 18, 2009

U.S. stocks advanced for a second straight week as profits from J.P. Morgan Chase and Intel surpassed estimates, lifting the Dow Jones industrial average above 10,000 for the first time in more than a year. But on Friday, General Electric's and Bank of America's results helped push the Dow average down 67.03 points, to 9995.91.

For the week, J.P. Morgan shares gained 0.5 percent as the firm reported its highest profit since 2007. Intel's sales forecast beat estimates, but its shares rose only 0.05 percent for the week. Harley-Davidson advanced 17 percent, the steepest gain among members of the Standard & Poor's 500-stock index, as it announced plans to sell a unit and to cut costs.

The S&P 500 rose 1.5 percent, to 1087.68, extending its 2009 gain to 20 percent. Nine out of 10 industry groups gained. Despite Friday's loss, the Dow rose 1.3 percent. It closed at a 12-month high of 10,062.94 on Thursday. The Nasdaq composite index added 0.8 percent, to 2156.80.

"No one would have guessed a year ago that we'd be in this position," said Matthew P. Kaufler, a portfolio manager at Federated Clover Investment Advisors. "A lot of the bellwethers have reported, and I think that's what's injecting some enthusiasm into the market."

J.P. Morgan rose 21 cents for the week, to $46.06. On Wednesday, the second-largest U.S. bank by assets reported third-quarter earnings of $3.59 billion, or 82 cents a share, its highest profit since the subprime mortgage market collapsed in 2007.

The Treasury will auction $30 billion of three-month bills and $30 billion of six-month bills on Monday. They yielded 0.07 percent and 0.16 percent, respectively. The Treasury will sell one-month bills and $27 billion of one-year bills the next day.

-- Bloomberg News

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