By Dan Strumpf
U.S. stocks rose Thursday, putting them on track for a third
straight session of gains amid a steady stream of earnings
reports.
The Dow Jones Industrial Average advanced 41 points, or 0.2%, to
18153 in afternoon trading, bouncing back from a morning loss.
The S&P 500 climbed three points, or 0.1%, to 2110. The
Nasdaq Composite Index gained three points, or 0.1%, to 5014.
Traders said an afternoon rally in the oil market helped lift
shares. Buyers included investors with bearish positions looking to
cover negative bets, they said.
"It's definitely forcing people back into the market," said
Justin Wiggs, managing director in equity trading at Stifel
Nicolaus, of the afternoon gains. "With earnings season kicking
off, people seem to be a little more on edge than normal."
In earnings news, shares of Citigroup Inc. rose 2% after the
bank reported its first-quarter profit jumped a
bigger-than-expected 21%.
Goldman Sachs Group Inc. said its first-quarter profit and
revenue rose, with results beating analysts' expectations. Still,
shares fell 0.7%.
Stocks have risen this month, advancing back toward all-time
highs. The Dow and S&P have both gained 2% so far in April and
are approaching records last seen in early March.
Crude-oil futures gained 1.6% to $57.25 a barrel, rising for a
sixth straight session. The gains pulled energy stocks out of
negative territory, with the S&P 500 Energy Index gaining
0.1%.
Losses in European markets had kept shares under pressure
Thursday, traders said. Germany's DAX fell 1.9% and France's CAC 40
lost 0.6%, as German government bonds hit record highs.
"There's still nervousness about Europe for sure," said Steve
Bombardiere, trader at Conifer Securities. "We have these days
where it just overtakes whatever the earnings news is."
Stocks rose Wednesday, pushing the Nasdaq Composite closer to
its all-time high. The Russell 2000 index of small-capitalization
stocks hit an all-time high Wednesday. The index pulled back 0.1%
on Thursday.
Much of investors' attention, however, remained on the steady
stream of earnings reports. Money managers are bracing for a
pullback in quarterly earnings in the first quarter, as the slump
in oil prices and the strong dollar tripped up many companies.
Analysts expect S&P 500 companies to report a 4.5% fall in
first-quarter earnings, according to FactSet.
"It's a market that is no longer cheap," said Stephen Freedman,
head of cross-asset strategy at UBS Wealth Management Americas.
"You need to have earnings growing at a reasonable pace for the
market to progress."
Mr. Freedman says he expects earnings to grow between 8% and 10%
for the full year, excluding energy companies. Against that
backdrop, he says broad market benchmarks can see high single-digit
returns this year.
"It's an earnings-driven market," he said.
In other earnings news, UnitedHealth Group Inc. lifted its
full-year guidance due to a stronger-than-expected 13% increase in
first-quarter revenue. Shares jumped 3.6%.
Netflix Inc. said Wednesday it added 4.88 million subscribers in
the March quarter, which topped Netflix's own forecast for 4.05
million additions. Shares soared 14%.
SanDisk Corp. shares sank 5.5% after the chip maker said its
first-quarter profit plunged 86%, as revenue fell and the company
booked acquisition and restructuring-related charges.
In economic news, jobless claims rose 12,000 to 294,000 in the
week ended April 11, the Labor Department said. Economists had
expected 280,000 claims.
U.S. housing starts rose 2% in March from a month earlier to an
annual rate of 926,000, the Commerce Department said. Economists
surveyed by The Wall Street Journal had expected an annual rate of
1.04 million.
In other markets, gold futures added 0.4% to $1205.60 an
ounce.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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