US stocks rally buoyed by GE earnings

GMT 17:30 2015 Friday ,16 October

Arab Today, arab today US stocks rally buoyed by GE earnings

US stocks rallied in early trade on October 16
New York - AFP

US stocks continued to rally in early trade Friday buoyed by forecast-beating earnings at industrial heavyweight General Electric.

About 30 minutes into trade, the Dow Jones Industrial Average added to Thursday's 217-point gain with another 29.26 points (0.17 percent), at 17,171.01.

The broad-based S&P 500 rose 4.43 (0.22 percent) to 2,028.29, while the tech-rich Nasdaq Composite Index was up 5.29 (0.11 percent) at 4,875.39.

GE shares jumped 2.2 percent after the company beat profit expectations with $2.51 billion in its third quarter, though it slightly missed on revenues, which declined 1.3 percent to $31.7 billion.

Market sentiment was dulled somewhat as fresh data showed US industrial output contracted by 0.2 percent in September, mainly pulled down by slower activity in the oil and gas sector.

Buyers overall though remained hesitant after Thursday's sharp gains, when the S&P 500 added 1.49 percent and the Nasdaq 1.82 percent.

Patrick O'Hare of said the gains were "more of a sentiment-driven rally than a fundamentally-driven rally," with investors ignoring signs, like companies widely reporting lower revenues in the third quarter, of slower economic activity.

"The reality of the situation is that the real economy looks to be sputtering, yet equity markets have flipped on their virtual reality masks again and are in their own little world where bad news is good news."

Among other companies reporting for the quarter, Honeywell lost 0.8 percent as it slightly topped profits forecasts but came up short on revenues and lowered its full-year revenue forecasts.

Toymaker Mattel surged 3.6 percent despite missing earnings forecasts, and Advanced Micro Devices slipped 0.3 percent as it turned in a loss that was smaller than expected.

Resort and gaming power Wynn Resorts showed the downturn in its Macau business with a 27.3 percent plunge in revenues. Profits per share were off by 56 percent but met expectations. The shares fell 4.6 percent.

Bond prices edged higher. The yield on the 10-year US Treasury fell to 2.01 percent from 2.02 percent Thursday, while the 30-year slipped to 2.85 percent from 2.86 percent. Bond prices and yields move inversely.

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