Stocks climb on first quarter results
NEW YORK (AP) - Stocks resumed their advance after investors got the numbers they wanted from first-quarter earnings reports.
The Dow Jones industrial average rose 25 points yesterday. The other major indexes also posted moderate gains.
Investors set aside some concerns about the government's civil fraud case against Goldman Sachs Group Inc. and looked to profit numbers. Beyond those reports, a bounce in the price of crude oil after a two-week slide helped energy stocks.
Harley-Davidson Inc., industrial equipment maker Illinois Tool Works Inc., regional bank Marshall & Ilsley Corp. and rose after reporting earnings.
Goldman Sachs said its first-quarter profit nearly doubled on higher trading revenue. However, the stock fell on concerns about the company's legal troubles.
Investors sold some of the companies that posted earnings after bidding the stocks higher in recent weeks. Still, the tone of the reports and forecasts offered investors more signs that the economy is rebounding.
James Meyer, chief investment officer at Tower Bridge Advisors in Conshohocken, Pensylvannia, said stocks are not as likely to leap higher because investors have come to expect that profits will top forecasts.
"We all know now that the economy is recovering at a rate that is faster than we thought two or three weeks ago and the market has adjusted," Mr. Meyer said. He said that could bring more volatility in the coming weeks when investors start looking for something else to propel the market.
Stocks have rocketed higher since major stock indexes hit 12-year lows more than 13 months ago. Yesterday's move extended a streak of steady gains seen in the past two months. Improving economic and earnings reports have given investors more confidence that the economy will mount a sustained recovery.
According to preliminary calculations, the Dow rose 25.01, or 0.2 percent, to 11,117.06. The Standard & Poor's 500 index rose 9.65, or 0.8 percent, to 1,207.17. The Nasdaq composite index advanced 20.2, or 0.8 percent, to 2,500.31.
Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.1 billion shares, compared with 1.3 billion on Monday.
The Dow rose 73 points on Monday after being lower throughout much of the day on concerns about the fallout from the charges against Goldman. The index climbed 100 points during the last two hours of trading.
Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia, said the market climbed with little break ahead of the earnings reports so a slowdown is not unexpected.
"We got paid ahead for this earnings period," Mr. Stone said.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note was unchanged at 3.80 percent from late on Monday.
Crude oil for May delivery rose $2 to $83.45 per barrel on the New York Mercantile Exchange. Oil has fallen in eight of the past nine trading days since reaching $87 per barrel. Disruptions to air travel from the volcanic eruption in Iceland is hurting demand for jet fuel.
Analysts said that the rise in stocks was a sign that the market's slow grind higher is continuing after a slide last week. The market fell on Friday after the Securities and Exchange Commission said Goldman Sachs failed to tell clients about conflicts of interest in mortgage investments it sold. Goldman has denied wrongdoing and vowed to fight the charges.
Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey, said the market is able to resume its climb in part because the government has flooded the financial system with so much cash that some of it ends up in stocks.
Among stocks in the news, Goldman Sachs fell $3.34, or 2.1 percent, to $159.98.
Illinois Tool rose $1.90, or 3.9 percent, to $50.71, while Marshall & Ilsley rose 90 cents, or 10.7 percent, to $9.31. Harley-Davidson advanced $2.40, or 7.3 percent, to $35.17.
Exxon Mobil rose 74 cents, or 1.1 percent, to $68.97. Schlumberger Ltd., which provides services to oil companies, rose $2.61, or 4 percent, to $67.85. Chevron rose 73 cents, or 0.9 percent, to $82.05.
The Russell 2000 index of smaller companies rose 10.15, or 1.4 percent, to 721.55.
Britain's FTSE 100 rose 1 percent, Germany's DAX index rose 1.7 percent, and France's CAC-40 gained 1.4 percent. Japan's Nikkei stock average fell 0.1 percent.