NEW YORK - US stocks bounced back on Wednesday after Procter & Gamble Co. beat earnings expectations, improving sentiment about the consumer, while software maker Adobe Systems Inc. affirmed its profit forecast, boosting the lagging tech sector.
The advance on improved earnings reversed two days of declines spurred by worries
about the Federal Reserve's next move on interest rates.
P&G gave the biggest lift to both the Dow and the S&P 500. On Nasdaq, Adobe shares led gainers and rose nearly 14 per cent, making it the biggest daily percentage gain in more than five years.
Time Warner Inc., the world's largest media company, said quarterly operating profit topped forecasts even though its revenue trailed expectations.
"Procter and Gamble, which is a great proxy for the consumer, came out with a nice earnings report and Time Warner also had a good showing and their businesses are very directed to the individual," said Eric Kuby, chief investment officer at North Star Investment Management Co. in Chicago.
The Dow Jones industrial average rose 74.20 points, or 0.67 per cent, to end at 11,199.93. The Standard & Poor's 500 Index gained 7.63 points, or 0.60 per cent, to finish at 1,278.55. The Nasdaq Composite Index climbed 16.82 points, or 0.82 per cent, to close at 2,078.81.
Procter & Gamble's stock climbed 4.2 per cent, or US$2.36, to US$58.29 and Time Warner's shares gained 2.6 per cent, or 42 cents, to US$16.67, both on the New York Stock Exchange. Adobe's shares surged 13.9 per cent, or US$3.94, to US$32.28 on Nasdaq.
After the closing bell, shares of Starbucks Corp. fell 9.6 per cent to US$30.12 on the Inet electronic brokerage system after the world's largest coffee-shop chain reported disappointing July sales. The stock closed on Nasdaq at US$33.30, up 1 per cent, or 34 cents.
During the regular session, shares of natural gas companies rose on the heat wave in the Northeast United States and as a tropical storm brewing in the Caribbean stirred concerns about supply disruptions and drove natural gas futures prices higher.
El Paso Corp. shares gained 1.5 per cent, or 24 cents, to US$16.20 and Cabot Oil & Gas Corp. jumped 2.1 per cent, or US$1.11, to US$54.81.
Back on the earnings front, Cigna Corp. led a rally in health-care stocks after it reported a quarterly profit well above Wall Street's estimates. Cigna shares jumped 10.2 per cent, or US$9.44, to US$102.10 on the NYSE.
Another boon for Nasdaq was Electronic Arts Inc. The world's biggest video game publisher late on Tuesday bumped up its full-year revenue forecast and reiterated its full-year earnings outlook. EA shares jumped 7.7 per cent, or US$3.60, to US$50.12, making it the Nasdaq's second-biggest gainer.
While Wall Street's attention was focused on earnings, the Fed's next rate move is still hanging over the market. The Fed's policy-setting committee meets on Tuesday, and the market is uncertain about whether the Fed will raise rates for the 18th consecutive time since June 2004.
"There are hopes that at the Fed meeting next week, they will pause in raising interest rates or at least will indicate they are close to the end of this rate-hike campaign," said Joseph Battipaglia, chief investment officer for Ryan, Beck & Co. "That's supportive to stocks in the short term."
Trading was active on the NYSE, with about 1.75 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 1.81 billion shares traded, slightly above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of 7 to 3 on the NYSE and by 8 to 5 on Nasdaq.
- REUTERS
NEW YORK - US stocks bounced back on Wednesday after Procter & Gamble Co. beat earnings expectations, improving sentiment about the consumer, while software maker Adobe Systems Inc. affirmed its profit forecast, boosting the lagging tech sector.
The advance on improved earnings reversed two days of declines spurred by worries
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