Earnings, China Data Boost U.S. Stocks
Stocks rose and the S&P 500 cruised to its sixth advance in seven sessions, after a handful of upbeat corporate
earnings reports and positive signs from China.
The Dow Jones Industrial Average climbed 95.88 points, or 0.6%, to close at 15509.21. The S&P 500 index gained 5.69
points, or 0.3%, to 1752.07, while the Nasdaq Composite Index advanced 21.89 points, or 0.6%, to 3928.96.
Ford Motor rallied after beating third-quarter earnings and revenue expectations and raising its profit and margin
forecasts. The auto maker also lifted its projections for sales in China.
Homebuilder stocks got a lift from PulteGroup's quarterly earnings report, which showed revenue rising on an increase
in home prices and closings.
Apple gained after activist investor Carl Icahn boosted his investment in the stock and continued to push the company
for a $150 billion stock buyback in a letter sent to Apple Chief Executive Tim Cook. Mr. Icahn owns a stake of about
0.5% in Apple.
Dow industrial 3M edged up after reporting third-quarter earnings and revenue above analyst estimates, helped by sales
growth in all business groups.
Telecommunications stocks were the worst performers after AT&T's third-quarter earnings increased just above
estimates, while revenue rose in line with forecasts.
U.S. stocks followed global markets higher after Chinese manufacturing data suggested the world's second-largest
economy will reach the government's 7.5% growth target for the year. HSBC's preliminary China Manufacturing Purchasing
Managers' Index for October rose to a seven-month high.
Investors voiced optimism about the U.S. stock market after lawmakers averted a U.S. debt crisis earlier this month
and as concerns that the Federal Reserve will start to cut back its stimulus efforts this year recede.
"We've been able to sidestep every land mine and find solutions, even if they come at the last minute," said Jay Wong,
co-portfolio manager at Los Angeles-based Payden & Rygel, which oversees about $85 billion. "The market continues to be
supported by growth, and an ability to dodge every bullet that comes along," he said.
After weeks of sitting on their hands due to uncertainty tied to gridlock in Washington, investors are looking for
chances to buy stocks, said David Lafferty, chief investment strategist for Natixis Global Asset Management, which
oversees $783 billion.
"Investors look predisposed to bidding up equities in the absence of bad news," Mr. Lafferty said. "The shutdown and
the Fed's taper talk had cast a pall over the market, but those issues are now on the back burner."
Still, Mr. Lafferty said that third-quarter earnings have been checkered so far and that he expects the stock market's
big gains to slow without more optimistic signals from U.S. corporations. The S&P 500 is up 23% so far this year.
"The speed of the ascent is going to slow," he said.
In U.S. economic news, the number of people seeking first-time jobless benefits fell last week, but came in higher
than economists expected. Initial claims for jobless benefits declined by 12,000 to a seasonally adjusted 350,000 last
U.S. imports and exports both held virtually unchanged in August, reflecting a slow-growing global economy and tepid
demand from American consumers.
Markit's flash purchasing managers' index showed the U.S. factory sector barely expanded in October.
The yield on the 10-year Treasury note edged up to 2.520% from nearly a four-month low of 2.482% late Wednesday.
The dollar sank to a 23-month low against the euro amid expectations that the Federal Reserve will continue to provide
extra liquidity. The euro later pared its gains after relatively downbeat euro-zone data. The dollar also lost ground
against the yen.
European markets also advanced Thursday, as China's economic report offset a soft reading on the euro zone. Europe's
Stoxx Europe 600 rebounded 0.4%. Germany's DAX 30 index climbed 0.7%, and France's CAC 40 index tacked on 0.4%. The
U.K.'sFTSE 100 index advanced 0.6%.
Growth in euro-zone business activity fell in September from the prior month, versus expectations for a slight
Asian markets were mostly higher. Japan's Nikkei Stock Average gained 0.4%, and Australia's S&P/ASX 200 rose 0.3%.
China's Shanghai Composite shed 0.9% as another rise in the interbank lending rate revived fears of the liquidity crunch
that rocked the markets in June.
December crude-oil futures rose 0.3% to settle at $97.11 a barrel, after settling at the lowest level since June on
Wednesday. November gold futures gained 1.2% to settle at $1,350.20 a troy ounce.
In other corporate news, Visa gained after the company's board authorized a 21% dividend increase, the fifth time the
payments company has boosted the payout on Class A shares since it went public in 2008.
Symantec dropped after the security-software company posted lower-than-expected results, lowered its full-year
guidance and issued current-quarter guidance below analysts' expectations.
McKesson climbed after confirming its bid for German pharmaceutical retailer Celesio. McKesson, a drug distributor,
also posted results that beat expectations and lifted its full-year earnings outlook.
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