Wednesday 29th January 2014
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Better-than-expected corporate earnings including from Pfizer and stronger-than-expected US consumer confidence helped propel equities on both sides of the Atlantic.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.49 percent, the Standard & Poor's 500 Index gained 0.47 percent. The Nasdaq Composite Index edged 0.05 percent lower.
Gains in shares of Pfizer, last up 2.7 percent, and those of Visa, last 1.8 percent stronger, propelled the Dow higher.
Shares of Comcast also rose, last up 0.9 percent, after reporting results that surpassed expectations. The cable company is near a deal to buy assets from Charter Communications, Bloomberg News reported, citing people familiar with the matter.
The latest economic data were positive too.
The S&P/Case-Shiller index of property prices in 20 cities jumped 13.7 percent in November from a year ago, making it the largest 12-month gain since February 2006. It was a welcome reminder of industry strength following the disappointing December new homes sales data, a 7 percent slide reported yesterday by the Commerce Department.
Separately, the Conference Board's index of consumer attitudes increased to 80.7 in January, up from 77.5 in December and the highest reading in five months.
"Things have continued to look good at the end of 2013 and beginning of 2014," Gus Faucher, a senior economist at PNC Financial Services Group in Pittsburgh, told Reuters. "I would expect that we are going to continue to see growth this year that's above what we observed in 2014."
Some reports failed to meet the mark. Durable goods orders dropped more than expected, sliding 4.3 percent in December.
Also falling short was Apple. Its shares took a beating, last down 7.3 percent to US$510.33 after the company reported iPhone sales of 51 million in the latest quarter, which failed to meet expectations for 55 million.
"There were a lot of reasons to believe iPhone sales would grow double-digit in units in 2014 even as the market matured, but 1Q results and the March guide pretty much put that thesis to rest," Raymond James analyst Tavis McCourt wrote in a note, according to Reuters. McCourt downgraded Apple's stock to 'outperform' from 'strong buy' and slashed his price target to US$550 from US$700.
In Europe, the Stoxx 600 Index finished the day with a 0.7 percent gain from the previous close. Germany's DAX added 0.6 percent, while France's CAC 40 climbed 1 percent.
There is increased optimism about the outlook for corporate profits in the euro zone.
"We will start to see positive earnings surprises increase in Europe in the next few quarters," Didier Duret, chief investment officer at ABN Amro Private Banking in Amsterdam, told Bloomberg News.
The UK's FTSE 100 rose 0.3 percent. A report showed the country's gross domestic product grew 0.7 percent in the initial estimate for the final quarter, making 2013 the best year since 2007.
"We have now seen four successive quarters of significant growth and the economy does seem to be improving more consistently," Joe Grice, chief economic adviser at the UK Office for National Statistics, said in a statement. "Today's estimate suggests over four-fifths of the fall in GDP during the recession has been recovered, although it still remains 1.3 percent below the pre-recession peak."
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