By Anora Mahmudova and Sara Sjolin, MarketWatch
Delta soars on earnings beat
U.S. stocks moved higher on Wednesday, as better-than-expected
earnings from companies such as Intel Corp. and Delta Inc. lifted
the main benchmarks.
Investors appeared to have brushed off weaker-than-expected
manufacturing data released ahead of the opening bell.
The Empire State manufacturing index plunged, falling to a
negative reading, while, industrial production fell by more than
expected in March. Both reports suggested a deceleration in
economic growth.
The S&P 500 (SPX) added 10 points, or 0.5%, to 2,105 and was
about 10 points away from the record level reached in March.
The Dow Jones Industrial Average (DJI) added as much as 100
points, but since then eased to trade 94 points, or 0.5%, higher at
18,132.16.
The Nasdaq Composite (RIXF) gained 18 points, or 0.4%, to
4,995.
James Abate, chief investment officer at Centre Funds, with over
$1 billion in assets under management, said companies so far are
beating or meeting lowered expectations, driving bullish
sentiment.
"The main reason equity markets are inching higher in an
environment where the economic growth is decelerating and earnings
falling, is because of monetary policy of abundant liquidity from
the ECB, Bank of Japan and even the Federal Reserve," Abate
said.
"So far in the earnings season, 35 of 37 companies on the
S&P 500 either beat or met expectations that were lowered down.
Companies have become very adept at boosting their earnings per
share by cutting cost, managing taxes and share buybacks," Abate
said.
Abate cautioned that such profit growth is unsustainable and
markets are highly vulnerable to a correction given high
valuations.
Wednesday's earnings: The results season continued at full
speed, with another major bank delivering ahead of the bell. Bank
of America Corp.(BAC) said it swung to a profit in the first
quarter
(http://www.marketwatch.com/story/bank-of-america-swings-to-quarterly-profit-2015-04-15-748540)
as it started to recover from its large legal losses in prior
years. Earnings, however, missed analyst forecasts. Shares were
down 0.6%.
Delta Air Lines Inc. (DAL) posted first-quarter profits that
were better than analysts' estimates
(http://www.marketwatch.com/story/delta-shares-up-as-profit-beats-to-cut-capacity-to-combat-dollar-strength-2015-04-15).
Although the strong dollar is creating headwinds, the airline said
the strengthening buck contributes to a lower fuel bill. Shares
jumped 4.2%.
Late Tuesday, Intel Corp.(INTC) reported a 3% rise in
first-quarter earnings
(http://www.marketwatch.com/story/intel-reports-3-rise-in-earnings-2015-04-14-164851539),
in line with analyst expectations. Shares were up 3.1% ahead of the
bell. RBC Capital Markets lifted the company to outperform from
sector perform and raised its target price to $40 from $38.
U.S.-listed shares of Nokia Oyj(NOK) fell 1.6% after the
telecom-equipment maker said it'll buy
(http://www.marketwatch.com/story/nokia-agrees-to-buy-alcatel-lucent-in-166-billion-deal-2015-04-15)
French rival Alcatel-Lucent (ALU) for $16.6 billion. Alcatel's U.S.
listing tanked 17%.
Read: 'Highly risky' and 'trophy assets' -- analysts rain on
Nokia-Alcatel's merger parade
(http://www.marketwatch.com/story/highly-risky-and-trophy-assets-analysts-rain-on-nokia-alcatels-merger-parade-2015-04-15)
Shares of Google Inc.(GOOGL) lost 1.1% after Europe's antitrust
regulator filed formal charges
(http://www.marketwatch.com/story/eu-to-file-antitrust-charges-against-google-2015-04-14-151034121)
against the online-search company.
For more on today's notable movers, read our Movers &
Shakers column ().
Data:The Empire State manufacturing index
(http://www.marketwatch.com/story/empire-state-index-drops-to-negative-12-in-april-lowest-since-december-2015-04-15)moved
sharply lower in April, falling to negative 1.2 from 6.9 in March,
the New York Fed said Wednesday.
Industrial production
(http://www.marketwatch.com/story/industrial-production-slumps-06-in-march-2015-04-15)
fell a seasonally adjusted 0.6% in March, the Federal Reserve said
Wednesday. The drop, the biggest since August 2012, was slightly
larger than expected.
A gauge of confidence among homebuilders
(http://www.marketwatch.com/story/homebuilder-confidence-increases-in-april-nahb-2015-04-15)rose
in April, according to the National Association of Home
Builders/Wells Fargo housing-market index released Wednesday.
Other markets: Chinese stocks slumped after data showed the
country's gross domestic product rose 7% in the first quarter
(http://www.marketwatch.com/story/china-data-what-the-experts-are-saying-2015-04-15),
confirming economic expansion is slowing down.
Meanwhile, the European Central Bank, as expected, left rates
unchanged Wednesday
(http://www.marketwatch.com/story/ecb-leaves-rates-unchanged-draghi-to-detail-qe-progress-2015-04-15).
ECB President Mario Draghi said its asset-purchase program is
proceeding 'smoothly'
(http://www.marketwatch.com/story/draghi-mocks-speculation-about-possible-early-exit-from-ecb-qe-program-2015-04-15)
during the press conference.
Crude oil (CLK5) held on to gains
(http://www.marketwatch.com/storyno-meta-for-guid) after the
International Energy Agency said global oil demand will grow more
than previously expected
(http://www.marketwatch.com/story/iea-sees-acceleration-in-oil-demand-growth-in-2015-2015-04-15)
in 2015. Most metals dropped, while the dollar moved higher
(http://www.marketwatch.com/storyno-meta-for-guid) against most
major currencies.
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