Earnings reports push stocks higher; Dow gains 73
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Friday, November 13, 2009; 5:55 PM
NEW YORK -- Encouraging earnings news from major retailers and The Walt Disney Co. drew investors back into the stock market to cap a second big week of gains.
The Dow Jones industrial average gained 73 Friday after falling 94 on Thursday. Major stock indexes rose more than 2 percent for the week.
Upbeat quarterly reports from Disney as well as Abercrombie & Fitch Co. and J.C. Penney Co. offset worries about a slide in consumer confidence.
Disney said late Thursday that higher revenue at its cable, broadcast and movie studio divisions helped drive profits up 18 percent. Abercrombie's results were better than expected, while J.C. Penney raised its earnings and sales forecasts.
The market stumbled briefly in morning trading after a report found that the mood of consumers darkened this month. The preliminary Reuters/University of Michigan consumer sentiment index for November came in at 66.0, down from 70.6 in October. That could bode poorly for the holiday shopping season.
Stocks rebounded after that report but later pared their gains as the dollar pulled off its lows of the day. The dollar's steady slide since March, due largely to record-low U.S. interest rates, has pushed stocks and commodities higher on hopes that it would help U.S. exports, which become cheaper overseas with the weak dollar.
Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors, said investors looked past the consumer confidence figure to focus on earnings reports because they are a more reliable indicator about the economy.
"It's probably safe to say that investors are rationally more focused on what consumers do rather than what they say," he said.
The Dow rose 73.00, or 0.7 percent, to 10,270.47. The Dow's drop Thursday broke a six-day winning streak, as oil prices tumbled following a drop in energy demand and a stronger dollar.
The broader Standard & Poor's 500 index rose 6.24, or 0.6 percent, to 1,093.48. The Nasdaq composite index rose 18.86, or 0.9 percent, to 2,167.88.
For the week, the Dow rose 2.5 percent, after jumping 3.2 percent last week. The gains have boosted the Dow's climb for the year to 17 percent after a slump in late October.
The S&P 500 index rose 2.3 percent for the week, while the Nasdaq added 2.6 percent.
