US Stocks Move Higher on Earnings Reports
Stocks rose for a second day in a row Wednesday, helped by a surprisingly strong earnings report from the giant aluminum company Alcoa. Technology stocks recovered after taking a drubbing over the past week.
KEEPING SCORE: The Standard & Poor's 500 index rose three points, or 0.2 percent, to 1,855 as of 11 a.m. Eastern. The Dow Jones industrial average rose 28 points, or 0.2 percent, to 16,282 and the Nasdaq composite rose 20 points, or 0.5 percent, to 4,133.
A IS FOR: Alcoa, a former Dow member, earned 9 cents per share in the first quarter excluding one-time items. The results came in well ahead of analysts' expectations. Alcoa is typically the first large company to report its results every quarter. Alcoa rose 46 cents, or 3.7 percent, to $12.99, one of the biggest gains in the S&P 500.
EARNINGS WORRIES: Investor enthusiasm for this upcoming earnings season has been hampered by the severe weather that plagued most of the country this winter. Corporate earnings are expected to fall 1.6 percent from a year ago, according to financial data provider FactSet. If earnings do fall year-over-year, it would be the first time corporate profits have fallen since the third quarter of 2012.
MATERIAL WORLD: Alcoa's strong results helped push other mining and material stocks higher. U.S. Steel rose 2 percent, industrial parts company W.W. Grainger rose 1.5 percent and auto parts company Delphi increased 1.5 percent.
DOCTOR IN THE HOUSE? Intuitive Surgical, the maker of robotic surgical equipment, slumped $35.26, or 7 percent, to $454.58 after the company warned investors that its first-quarter sales would be drastically lower than previously expected. Intuitive Surgical, like many other biotechnology stocks, has had some steep drops recently. It traded as high as $541.23 last Thursday.
HOTEL VACANCY: La Quinta Holdings, the parent company of the hotel chain La Quinta Inns, rose 16 cents, or 1 percent, to $17.16 on its first day of trading. La Quinta is owned by the private equity firm Blackstone Group and was taken public this week in a $650 million IPO.
ECONOMY WATCH: The Federal Reserve will release minutes from its March policy meeting later Wednesday. Also, the government reported that U.S. wholesale businesses increased their stockpiles for an eighth consecutive month in February. Their sales rose at the fastest pace since November.
BONDS AND COMMODITIES: Bond prices fell. The yield on the 10-year Treasury note edged up to 2.70 percent from 2.68 percent late Tuesday. The price of crude oil was flat at $102 a barrel. Gold fell $3 to $1,306 an ounce.