US stocks rise on earnings despite weak jobs report
A screen on the floor of the New York Stock Exchange, Tuesday, Oct. 22, 2013, shows the closing number for the Standard & Poor’s 500n Index. The prospect of more economic stimulus from the Federal Reserve pushed the S&P 500 close to a fourth consecutive record close, up 10 points to 1,754. AP
NEW YORK CITY—US stocks rose Tuesday on generally solid corporate earnings and increased confidence after a weaker-than-expected jobs report suggested the US Federal Reserve will not soon scale back its stimulus program.
The Dow Jones Industrial Average rose 75.46 points (0.49 percent) to 15,467.66.
The broad-based S&P 500 tacked on 10.01 (0.57 percent) at 1,754.67 while the tech-rich Nasdaq Composite increased 9.52 (0.24 percent) to 3,929.57.
The gains followed a trove of corporate earnings from companies like Dow component DuPont and consumer products company Kimberly-Clark, both of which bested expectations.
Analysts at Wells Fargo Advisors said that with roughly 100 members of the S&P 500 having reported earnings thus far, early results are “rather encouraging.”
Michael James, managing director of equity trading at Wedbush Securities, said investors were also reacting to the September US jobs report, which showed growth of 148,000 jobs, well below expectations. The disappointing results appeared to weaken the chances the Fed will quickly scale back its $85 billion-per-month bond-buying program.
“A weaker jobs report is why there is further belief that tapering is not going to be happening anytime soon,” James said.
James said investors were rotating cash out of some tech names such as Netflix, down 9.2 percent after its stock soared following Monday’s estimate-beating quarterly results, and into industrial companies, such as FedEx (up 1.8 percent).
Tech giant Apple dipped 0.3 percent after unveiling a pair of new tablets, including the “iPad Air,” touted for its lighter weight.
Drilling company Transocean shot up 6.0 percent after the organizers of the S&P 500 announced the company would join the index on October 28, replacing computer company Dell, which is being taken private.
Delta Air Lines tacked on 3.2 percent after earnings of $1.41 per share bested expectations by five cents. The company gave an upbeat assessment of market conditions, pointing to “strong holiday bookings” through the end of the year.
Other companies that gained after earnings reports included Kimberly-Clark (up 4.2 percent) and mining giant Freeport-McMoRan Copper & Gold (up 3.8 percent).
Handbag and accessory maker Coach fell 7.5 percent after revenues came in slightly below expectations at $1.15 billion. The company said North American sales fell 1 percent.
Other companies to see declines after earnings were Dow component United Technologies (down 1.2 percent) and EMC (down 4.8 percent).
Bond prices jumped. The 10-year Treasury fell to 2.51 percent from 2.62 percent Monday, while the 30-year declined to 3.61 percent from 3.68 percent. Bond prices and yields move inversely.
