US stocks ride strong results

Dow, S&P benchmarks post weekly gains. Stronger profits from Microsoft, McDonald's and other major US corporations pushed stocks higher on Friday. Optimism from Europe helped brighten the mood. The Dow Jones industrial average and the Standard & Poor's 500 index had a winning week for the first time this month. "There's been a wrestling match all week long between strong earnings and weak economic data," said Lawrence Creatura, a portfolio manager at Federated Investors, the money-management firm. "At the moment, earnings are winning." Before the market opened, McDonald's posted better quarterly profits, buoyed by warm weather and sales of new menu items like Chicken McBites and oatmeal. Sales picked up even in Europe, McDonald's' biggest market, despite economic turmoil and severe weather. Microsoft beat analysts' projections with quarterly earnings and revenue, and sales in its Windows division were surprisingly strong. And General Electric posted a profit of more than $3 billion (Dh11 billion), helped by orders for locomotives, aircraft engines and other equipment. The Dow rose 65.16 points to close at 13,029.26. The S&P 500 added 1.61 points to 1,378.53. Pleasant surprise Corporate earnings results have provided a pleasant surprise, said Sam Stovall, chief equity strategist at S&P Capital IQ. After nine straight quarters of growth, earnings for S&P 500 companies were expected to be nearly flat. But eight of every 10 companies that have reported so far, including Coca-Cola and IBM, have beaten estimates. As a result, first-quarter earnings are now projected to rise 4.4 per cent, according to S&P. In Europe, Germany's DAX rose 1.2 per cent, and stock indexes in France and Spain were higher. A closely watched survey in Germany, the continent's economic powerhouse, showed business optimism rising for the sixth straight month. Economists had expected a decline. In other US trading, Apple sank 2.5 per cent, helping to tug the Nasdaq composite index down 7.11 points to 3,000.45. Apple, the most valuable company in the world, accounts for 12 per cent of the Nasdaq. The Dow gained 1.4 per cent last week, and the S&P 500 index 0.6 per cent. But it wasn't a smooth ride. Better earnings reports and higher retail sales helped drive the stock market up to start the week. The Dow rose 194 points on Tuesday, its best day in more than a month. Then worries about Eur-ope came storming back. Markets reversed course on Wednesday, after the Bank of Spain said that the amount of bad loans held by Spanish banks rose to an 18-year high. If those banks falter, it would put pressure on Spain's already troubled government to prop them up. Weak reports on jobs, housing and manufacturing in the US added to the selling pressure, and the Dow slumped 151 points in two days. "It's been like the weather here in upstate New York — unpredictable," Creatura said. "One day is up, the next day is down." The encouraging news out of Germany helped drive oil prices up Friday. Benchmark US crude rose 78 cents to finish at $103.05 per barrel in New York. Brent crude, widely used by US refiners to produce gasoline, added 76 cents to $118.76 in London. Major movers Oil services giant Schlumberger Ltd. rose 3 per cent. The company's quarterly profits jumped almost 38 per cent as strong drilling activity in the Gulf of Mexico and the Middle East offset a slowdown in North America's natural gas fields. Schlumberger said that world oil demand appears to have "stabil-ised" and that the risk of a double-dip recession has declined. E-Trade Financial Corp. jumped 6 per cent, the largest gain in the S&P 500. The online broker reported a 40 per cent jump in first-quarter profit after the close of trading Thursday, beating Wall Street estimates. SanDisk Corp. plummeted 11 per cent, the S&P's biggest loser. The flash memory maker said on Thursday that weak demand and low prices cut its quarterly profit by nearly half. From: Gulfnews