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NEW YORK, Jan 25 AFP

January 26 2013, 11:55AM

Strong earnings reports from Procter and Gamble, Halliburton and other equities propelled US markets higher, pushing the much-watched S&P 500 past the 1,500 mark for the first time in five years.

Apple shares lost another 2.4 per cent on Friday and ceded its position as the world's largest company by market value to ExxonMobil, but that had little impact on overall bullishness.

At the close, the Dow Jones Industrial Average was up 70.65 (0.51 per cent) to 13,895.98, its best level since October 2007.

The broad-based S&P 500 continued its streak of gains, adding 8.14 (0.54 per cent) to 1,502.96; the last time it topped the 1,500 level was December 10, 2007.

The tech-heavy Nasdaq Composite Index jumped 19.33 (0.62 per cent) to 3,149.72.

Friday's better-than-expected earnings reports were "boosting sentiment," according to a note from Charles Schwab & Co.

The markets largely overlooked a surprising slide in US new home sales in December and a larger than expected contraction in UK growth, Schwab said. Instead, markets fixated on the earnings and positive news from Europe.

Germany's business confidence rose to its highest level in seven months, according to the Ifo institute index; and the European Central Bank said that 278 eurozone banks will repay early 137 billion euros ($US184.5 billion) of loans made available in emergency liquidity measures.

Among the companies reporting earnings Friday, Procter and Gamble rose 4 per cent after besting forecasts by a wide margin and giving an improved outlook for 2013.

Halliburton soared 5.1 per cent higher after beating analyst forecasts on the strength of its international operations.

Among other companies reporting earnings, AT&T gained 0.8 per cent, Starbucks rose 4.1 per cent, and Honeywell added 0.1 per cent.

Microsoft rose 0.9 per cent one day after reporting earnings slightly above expectations.

Other technology issuers also flourished. Netflix jumped 15.5 per cent, Priceline.com rose 5.8 per cent and book retailer Amazon.com advanced by 3.8 per cent.

Friday's trade saw slumping Apple and oil behemoth ExxonMobil trade off as the biggest company. By the close Exxon shares were up 2.4 per cent to give it a market value of $US418 billion, while Apple lost 2.4 per cent, falling to $413 billion.

Bond prices fell sharply. The yield on the 10-year US Treasury rose to 1.95 per cent from 1.84 per cent late Thursday, while the 30-year yield increased to 3.13 from 3.04 per cent the prior day. Bond prices and yields moved inversely.