U.S. Stocks Higher On Amazon, Boeing Results
NEW YORK (MarketWatch) - U.S. stocks rose Wednesday after solid earnings from Boeing Co. and Amazon.com Inc. helped calm fears about the home-loan crisis, which on Tuesday sparked the Dow's biggest drop in four months.
The Dow Jones Industrial Average gained 88 points to 13,806 in the early going, with 25 of its 30 stocks on the rise, led by Boeing , which reported a better-than-expected second-quarter. Shares of Boeing gained 3.3%.
The S&P 500 index rose 12.6 points to 1,523, while the Nasdaq Composite advanced 24 points to 2,664.
But gains may be limited by ongoing concerns about the extent to which subprime lending problems are impacting prime loans and weakness in the junk bond sector.
"There is a limit to how much positive spill over you can get from Amazon," said Elliot Spar, option market strategist at Ryan Beck & Co. "The banks and brokers have to make a stand soon, or we will be subject to another round of selling."
The Dow industrials on Tuesday shed 226 points after worse-than-expected DuPont results. There also were concerns about the financial sector in the wake of a warning from Countrywide Financial and growing bad debts at American Express.
On Wednesday the market will remain trained on credit market problems, earnings news, housing data and the Federal Reserve's latest survey of regional economies.
"Some earnings results are lifting the market," said Peter Cardillo, chief market analyst at Avalon Partners. "But the market is worried that subprime problems will spill over into the prime market. There is some evidence that this is happening, but not that much."
"So today's housing data and Beige book has the potential to calm the market's fears," he said.
Housing, Fed data
Existing home sales data for June is due at 10 a.m. Eastern. The MarketWatch forecast, based on a poll of economists, is for 5.9 million sales, which would be down from 5.99 million in May.
Earlier the Mortgage Bankers Association said its index fell 3.6% for the week ended Jul-20 in data released earlier, along with a 5.0% drop in the purchase index and a 1.4% decline in the refinancing index.
The Fed's Beige Book will be released at 2 p.m. Eastern.
The Earnings Parade
Shares of online retailer Amazon.com soared 21% to $86 after late Tuesday reporting earnings that were more than triple those booked a year before and 35% revenue growth. The company also received upgrades from Bear Stearns and Lehman Brothers.
Boeing Co. reported that its second-quarter net income rose to $1.1 billion, or $1.35 a share, from a loss of $160 million, or 21 cents a share in the year-ago period. The aerospace giant said revenue jumped 14% to $17 billion. The company's earnings beat expectations. The stock shot up 2.8% to $106.68.
Xerox Corp. reported in a Securities and Exchange Commission filing that its quarterly earnings and revenue were a shade above expectations. It also upped is earnings outlook for the year.
Pharmaceutical company GlaxoSmithKline plc. reported earnings and revenue that did not meet analysts' expectations. The company softened the bad news by unveiling a new $25 billion buyback.
Colgate-Palmolive Co. reported a 47% jump in quarterly results and in-line earnings per share.
Corporate news
Wells Fargo & Co. plans to boost its quarterly dividend 11% to 31 cents a share.
Reynolds American Inc. also will raise its dividend. It plays a 13% increase to 85 cents a share.
Other markets
The expected gains in the stock market were helping to divert capital from the Treasury market. The benchmark 10-year note last was down 4/32 at 96-21/32 with a yield of 4.936%.
The dollar rose to a two-week high against the euro and gained against the yen early Wednesday, rebounding from multi-year lows it touched in the previous session. "Profit taking was the theme of te day," said Boris Schlossberg, senior currency strategist at DailyFX.com. "
The euro was last down 0.5% at $1.3745, while the dollar was up 0.3% at 120.46 yen.
Commodities were mixed in the early going. The front month crude contract last was up 6 cents at $73.62 a barrel as gold futures were $7.30 lower at $677.50 an ounce.
By Kate Gibson