U.S. stocks stayed above the threshold reached yesterday as a late-session buying helped offset weakness in banking and technology shares. Financials dragged on stocks through the early afternoon even as Goldman Sachs and Citigroup reported better-than-expected profit reports. However, the final fifteen minutes witnessed much of the activity as higher oil prices sent energy stocks higher and, in turn, helped the broader market.
The Dow Jones industrial average closed above the 10,000 level for the second-successive day, edging up 47 points, or 0.5%. The S&P 500 index edged up 4 points, or 0.4% and the tech-heavy Nasdaq composite ended the day virtually flat. The gains in the Dow average were led by Microsoft (NASDAQ:MSFT) whose shares jumped 2.9%. The Windows 7 is slated for release on October 22.
Among energy stocks, Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) shares climbed 1.6% and 1.5%, respectively, as crude prices jumped to their highest levels of the year. Meanwhile, the US Department of Energy said gasoline stockpiles fell 5.2 million barrels per day last week, well below expectations of 700,000 decline.
Pfizer (NYSE:PFE) rose 1.7% after it completed its acquisition of Wyeth.
Nevertheless, weakness in financial sector shares, off 0.6%, hurt sentiment even as Goldman Sachs (NYSE:GS) reported estimate-topping numbers. Citigroup’s (NYSE:C) strong trading returns were overcome by increasing consumer loan losses. Citi’s (NYSE:C) CEO Vikram Pandit warned, “US consumer credit remains the number one issue affecting our near-term results.” JP Morgan (NYSE:JPM) CEO Jamie Dimon warned that level of loan losses are likely to remain high.
Tech shares also failed to advance, even as IBM (NYSE:IBM) raised its earnings outlook and reported numbers that were above Street projections. Advanced Micro Devices’ (NYSE:AMD) narrower-than-expected loss and the return of its core chip-making operations to profitability failed to lift sentiments either. However, Google’s (NASDAQ:GOOG) better-than-expected results were helped by return to sequential quarterly growth, a 5% increase in average cost-per-clicks over the second quarter, and a positive impact from the declining dollar. Shares in Google (NASDAQ:GOOG) rose 3.6% in after-hours trading as CEO Eric Schmidt noted, “While there are a lot of uncertainties about the pace of [the] economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.”
Today’s expected results include a number of significant results from companies such as Bank of America (NYSE:BAC), Genuine Parts (NYSE:GPC), General Electric (NYSE:GE), and Mattel (NYSE:MAT). Also reporting are: Halliburton (NYSE:HAL) and First Horizon National (NYSE:FHN).