The Dow Jones industrial average (INDU) jumped 65 points, or 0.5%, and the S&P 500 (SPX) rose 2 points, or 0.1%. The Nasdaq (COMP) ended 7 points lower, or 0.2%, as shares of Apple (AAPL, Fortune 500) lost more than 2%.
Friday was a light day on the economic calendar, but investors continued to wade through first-quarter results from several large firms.
Quarterly earnings this round have been surprisingly strong. Of the 121 companies in the S&P 500 that have reported, more than 80% have beat expectations, according to Thomson Reuters. During a typical quarter, only about 60% of companies beat estimates.
"Today's it's all about earnings, earnings, earnings," said Fred Dickson, chief market strategist at D.A. Davidson & Co. "The number of companies reporting positive suprises is much higher than it typically is at this stage in the game. They're only beating by a little bit, but it's still a significant number of companies, and that's the wow factor."
Anxieties remain, however, about European debt and the question of whether large economies like Spain and Italy may be drifting toward crisis.
"We're approaching the middle inning of the European-debt ball game," said Dickson. "We're over two years into their problems, and we have at least two or three more years to go until the end of the game."
Encouraging news came in before the opening bell from Germany, where a reading on business confidence unexpectedly increased for the sixth straight month. The ripple effect helped turn around European markets, and boosted the euro and oil prices.
Over the past few months, the European Central Bank has pulled out all the stops to prevent a credit crunch by providing banks with €1 trillion in ultra-low cost financing. But the potency of the ECB's two long-term refinancing operations, or LTROs, appears to be fading, as yields on Spanish and Italian bonds have shot higher in recent weeks.
"We've really moved into the big leagues in terms of how much it might take if Spain goes over the edge," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. "It's not clear if the IMF or any other entity will have the money to prevent that."
The dollar fell against the euro, the British pound and the Japanese yen.
Oil for May delivery rose 78 cents to settle at $103.05 a barrel.
Gold futures for April delivery gained $1.50 to $1,642.10 an ounce.
No comments:
Post a Comment