Stocks jump on strong earnings

Earnings from the Dow components beat expectations, sending foreign shares up more than 1%. Investors bet the Fed will take steps to boost the economy. Apple tops $300.

By TheStreet Staff Oct 13, 2010 7:59AM

TheStreetBy Melinda Peer, TheStreet

 

Updated at 1:37 p.m. ET

 

The Dow Jones Industrial Average was gaining more than 100 points as investors' appetite for stocks improved on expectations that the Federal Reserve will take steps to boost the economy soon.

 

At 1:37 p.m. ET, the Dow Jones Industrial Average ($INDU) was up by 122 points, or 1.1%, at 11,143. The S&P 500 ($INX) was up by 13 points, or 1.1%, at 1,183. The Nasdaq ($COMPX) was rising by 31 points, or 1.3%, to 2,449.

 

Global stocks rose after minutes from the latest meeting of the Federal Reserve's policy-setting arm indicated the Fed is ready to take steps to encourage borrowing. Strong earnings from key tech and financial companies also added to Wednesday's momentum.  

 

Cisco (CSCO) was leading the Dow, climbing 3.2%, followed by American Express (AXP) and Boeing (BA). Most of the benchmark's components were gaining.

 

JPMorgan Chase (JPM) reported a third-quarter profit of $1.01 a share, exceeding Wall Street's estimates of 88 cents. JPMorgan shares were down 0.1% to $40.34.

Late Tuesday, Intel (INTC) topped earnings expectations by 2 cents and said strong demand is expected to continue in the fourth quarter. Intel shares were falling 0.5% to $19.66.

 

CSX (CSX) shares were jumping 4.2% to $59.62. The rail transportation company said yesterday that it expects "slow, steady growth" for 2011. The company reported third-quarter earnings that rose 43% to $414 million, or $1.08 a share, beating the $1.04 average estimate of analysts surveyed by Thomson Financial.

 

Apple (AAPL) shares crossed $300, rising 1% to $301.43. The nation's largest retailer Wal-Mart (WMT) this week said it will start selling the iPad.

 

Sirius XM (SIRI) said it added 334,727 net subscribers in the third quarter, compared with 102,295 in the year-earlier quarter. Sirius shares were climbing 3% to $1.39.

 

Shares across the oilfield-services sector were rising on news that the Obama administration called off the ban on offshore drilling that it put in place in the wake of the BP (BP) oil spill.


Deep-water drillers Schlumberger (SLC), Halliburton (HAL) and Baker Hughes (BHI) were all up by more than 1%. Schlumberger was advancing 1.1% to $63.36, Halliburton was rising 1.3% to $35.29, and Baker Hughes was jumping 1.7% to $45.47.

 

Dutch chip-maker ASML (ASML) reported better-than-expected third-quarter earnings and said sales more than doubled. ASML's American depositary receipts were up 5.8% to $32.30.

 

Import prices fell 0.3% in September after increasing 0.6% in August, while export prices rose 0.6%, compared with growth of 0.8% in August. Excluding oil, import prices ticked 0.3% higher after similar growth in the previous month, and September export prices, excluding agriculture, advanced 0.3% after previous growth of 0.5%.

 

At 2 p.m. ET, the U.S. Treasury is expected to report a September budget deficit of $33.5 billion, compared with a deficit of $46.6 billion in the prior month, according to Briefing.com.

 

The American Petroleum Institute will release its weekly report on crude oil inventories at 4:30 p.m. ET. Analysts, according to a Platts poll, anticipate a build of 1.5 million barrels in crude stocks in the week ended Oct. 8.

 

In commodity markets, crude oil for November delivery was adding $1.28 to trade at $82.95 a barrel. The December gold contract was gaining $24.10 to $1,370.80 an ounce.

 

The dollar was trading lower against a basket of currencies, with the dollar index down by 0.4%. The benchmark 10-year Treasury note fell 8/32, lifting the yield to 2.459%.

 

Hong Kong's Hang Seng jumped 1.5%, and Japan's Nikkei inched 0.2% higher. The FTSE in London was rising 1.5%, and the DAX in Frankfurt was gaining 2.1%.

 

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