US stocks rally on earnings boost, EU bank test results
Sunday, 25 July 2010
NEW YORK, July 24 (Agencies): US stocks extended gains Friday in cautious trading as Wall Street digested results of stress tests on European banks as well as US firms' quarterly earnings.
The Dow Jones Industrial Average climbed 102.32 points (0.99 per cent) to end the week at 10,424.62 after a gain of nearly two per cent, or 200 points, a day earlier on better-than-expected earnings of key US companies.
The tech-rich Nasdaq composite index rose 23.58 points (1.05 per cent) to 2,269.47 and the broader S&P 500 index added 8.99 points (0.82 per cent) at 1,102.66.
Investors were mostly relieved over a much-awaited report on stress tests on 91 European banks although some were highly suspicious of the rigor of the criteria used to gauge their ability to withstand financial shocks.
Seven banks failed the assessment, according to the Committee of European Banking Supervisors.
"While some argue that the tests weren't as 'stressful' as they'd hoped, the overall results were reassuring enough for Wall Street, with the bulls pushing the S&P 500 index north of the 1,100 level for the first time in more than a month," said analyst Andrea Kramer of Schaeffer's Investment Research.
The market also reacted favorably to better-than-expected corporate earnings and a 20-per cent increase in conglomerate General Electric's quarterly dividend, analysts said.
"The positive reaction by the market, albeit muted at first, may show that investors are anxious to move past the event and focus on earnings season," said analysts at Charles Schwab & Co in a note to clients.
Among companies that announced financial results was leading automaker Ford, which saw a 13-per cent net profit jump to 2.6 billion dollars on strong sales in the second quarter.
Microsoft reported after the market closed Thursday that it notched a 4.52-billion-dollar profit on revenue of 16.04 billion dollars in its fiscal fourth quarter, which ended June 30.
Dow component Verizon Communications meanwhile posted better-than-expected wireless customer growth and landline profit margins.
Ford shares jumped on the better earnings, rising 5.21 per cent to 12.72 dollars.
The Dow Jones Industrial Average climbed 102.32 points (0.99 per cent) to end the week at 10,424.62 after a gain of nearly two per cent, or 200 points, a day earlier on better-than-expected earnings of key US companies.
The tech-rich Nasdaq composite index rose 23.58 points (1.05 per cent) to 2,269.47 and the broader S&P 500 index added 8.99 points (0.82 per cent) at 1,102.66.
Investors were mostly relieved over a much-awaited report on stress tests on 91 European banks although some were highly suspicious of the rigor of the criteria used to gauge their ability to withstand financial shocks.
Seven banks failed the assessment, according to the Committee of European Banking Supervisors.
"While some argue that the tests weren't as 'stressful' as they'd hoped, the overall results were reassuring enough for Wall Street, with the bulls pushing the S&P 500 index north of the 1,100 level for the first time in more than a month," said analyst Andrea Kramer of Schaeffer's Investment Research.
The market also reacted favorably to better-than-expected corporate earnings and a 20-per cent increase in conglomerate General Electric's quarterly dividend, analysts said.
"The positive reaction by the market, albeit muted at first, may show that investors are anxious to move past the event and focus on earnings season," said analysts at Charles Schwab & Co in a note to clients.
Among companies that announced financial results was leading automaker Ford, which saw a 13-per cent net profit jump to 2.6 billion dollars on strong sales in the second quarter.
Microsoft reported after the market closed Thursday that it notched a 4.52-billion-dollar profit on revenue of 16.04 billion dollars in its fiscal fourth quarter, which ended June 30.
Dow component Verizon Communications meanwhile posted better-than-expected wireless customer growth and landline profit margins.
Ford shares jumped on the better earnings, rising 5.21 per cent to 12.72 dollars.