NEW YORK (Reuters):
U.S. STOCKS rallied yesterday, pushing all three major indexes up more than one per cent, as an early wave of strong earnings renewed investors' optimism on the outlook for corporate profits.
Investment bank Morgan Stanley and package delivery company FedEx Corp., often seen as a gauge for U.S. business activity and the health of corporate spending, both reported quarterly results that beat analysts' estimates.
An S&P index of financial services stocks, which includes Morgan Stanley, was up one per cent, while the Dow Jones Transportation Average jumped 2.9 per cent.
Hewlett-Packard Co. advanced 3.4 per cent, making it among the biggest positive influences on the Dow average, after the number two personal computer maker said late on Tuesday it will further streamline its business.
"The FedEx and Morgan reports were very well received by the markets and spurred a broad-based rally," said Evan Olsen, head of equity trading at Stephens Inc. in Little Rock. "Today's recovery is not concentrated only in big-cap shares, but small companies and tech shares are also rebounding."
The Dow Jones industrial average was up 132.48 points, or 1.21 percent, at 11,107.32. The Standard & Poor's 500 Index was up 15.52 points, or 1.25 per cent, at 1,255.64. The Nasdaq Composite Index was up 38.11 points, or 1.81 per cent, at 2,145.17
The earnings reports, among the first for the latest quarter, bolstered views that corporate earnings will continue to show robust growth despite rising interest rates. The Federal Reserve is expected to raise rates for a 17th consecutive time next week.
