Earnings, economy buoy US stocks

Positive overall quarterly earnings and some encouraging data on the economy protected US stocks last week from tensions over Ukraine and frail enthusiasm for tech stock. Markets fought off selling pressure on Thursday to end the holiday-shortened week with solid gains, and a surprise boost for the IPO star of the week, China’s Sina Weibo, served as an exclamation point for the period. The edginess of the previous weeks remained, though, as seen in general volatility and the huge amount of online and media discussion about inflation and a tech bubble, and especially in comparisons of the level of margin buying now and prior to previous sharp market falls. But with repeated assurances from the Federal Reserve that interest rates will stay at rock-bottom levels well into next year, signs of firm growth after the winter and no sign of inflation, investors stayed the course. The S&P 500 picked up 2.7 per cent to end at 1,864.85 for the week, leaving it still 0.9% higher than it started the year. The narrower Dow Jones Industrial Average gained 2.4% to 16,408.54, as did the tech-heavy Nasdaq Composite. But the Dow was 1.0% lower for the year and the Nasdaq nearly 2% down. Some big companies disappointed the market with earnings, with Bank of America dragged to a first quarter loss by legal costs, and IBM and Google both also challenged by tougher markets. But S&P Capital IQ said that of the 84 members of the S&P 500 to report so far, 53 beat forecasts, 22 missed and the rest were on par with expectations. “On balance, even though there are some household names that have disappointed, like JPMorgan and IBM, the earnings season has been better than expected,” said Art Hogan, chief market strategist at Wunderlich Securities. Even Google, which took a sharp fall on Thursday as investors took note of rising costs and lower-than-expected earnings gains, still ended the week up 1.0%, according to AFP.