Equities staged a modest advance as investors weighed another batch of strong earnings reports and a stronger dollar. Investors’ confidence also got a boost after Caterpillar and eBay raised their earnings forecasts and McDonald’s came out with better-than-estimated earnings.
Stocks had rallied in the morning session on some better-than-anticipated earnings but the enthusiasm soon dissipated as the greenback began to climb. The Dow Jones Industrial Average added 39 points, or 0.35%, to 11146.57. The broader S&P 500-stock index edged up 2 points, or 0.2%, to 1180.26 and the tech-heavy Nasdaq added 2.28 points, or 0.1%, to 2459.67.
The Dow average jumped as mush as 105 points in the morning session after three of its components – Caterpillar (NYSE:CAT), McDonald’s (NYSE:MCD) and Traveler’s Cos. (NYSE:TRV) – reported better than expected earnings. Home Depot (NYSE:HD), up 3.5%, was the Dow’s top performer.
McDonald’s (NYSE:MCD) jumped 1.3% after reporting better-than-expected results. The company said it sees a 5-6% increase in October’s same-store sales. Travelers’ (NYSE:TRV) advanced 0.6% on its upbeat earnings and raised full-year guidance. Caterpillar, however, dropped 1.1% after it warned that growth in US and European markets would not be a sufficient cushion against a high level of unemployment.
Demand for Treasury bonds was weak. The yield on the 10-year note, which moves opposite its price, jumped to 2.54% from 2.48% late Wednesday. The US dollar climbed 0.3% to 77.634. Gold prices, last Thursday reaching a record high of $1,387.10, shed $18.60 during the session to close at $1,325.60. Crude prices dropped $1.98 to end at $80.53. On the New York Stock Exchange, more than 1 billion shares exchanged hands, with declining shares beating those that rose in price by a three-to-two margin.
American Express (NYSE:AXP) closed up 1.4% Thursday ahead of its earnings. After-the-close, the company reported earnings and revenue that beat estimates; however, its shares are down 0.8% in pre-market trade.
Thursday also marked investors’ apprehensions about an ensuing currency war, even as Group of 20 finance ministers meet over the weekend to discuss ways to prevent the issue from spiraling out of control. The US Treasury Secretary Geithner’s letter to peers asks countries to refrain from devaluing their currencies to gain a competitive edge, and to cap current account balances. Most expect his overtures toward emerging nations to meet with fractious, negative responses.
AMER EXPRESS CO (AXP): Free Stock Analysis Report
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