Citigroup's narrower-than-feared first-quarter loss and Google's biggest gain ever amid robust growth spurred a stock rally on Wall Street on Friday, and gave the Nasdaq Composite one of its best weeks in more than five years.
The Dow Jones Industrial Average rose 228.87 points, or 1.81 per cent, to 12,849.36. For the week, the Dow added 4.3 per cent, its biggest weekly advance since that ended February 1, bringing the blue-chip index to about 207 points from its 2008 peak on January 3.
The Standard & Poor's 500 index rose 24.77, or 1.81 per cent, to 1390.33, and also rose 4.3 per cent for the week. The Nasdaq Composite was up 61.14, or 2.61 per cent, to 2402.97. For the week it rose 112.73, or 4.9 per cent, its biggest weekly point gain since the week ended May 17, 2002.
Google jumped $89.87, or 20 per cent, to $539.41, its largest gain ever in a single session. The search giant topped Wall Street estimates with its first-quarter earnings, and said the economy hadn't hurt its business as feared.
That bolstered other Internet stocks, and American depositary shares of "the Chinese Google," Baidu.com, rose $31.25, or 10 per cent, to $341. Shares of the company whose data indicated Google could disappoint analysts with paid-click results, comScore, fell 40 cents, or 1.7 per cent, to $23.18, however.
On the Dow, Citigroup rose $1.08, or 4.5 per cent, to $25.11 even after the largest US bank by assets took a massive write-down of $13.9 billion and booked a $5.11 billion first-quarter loss. The bank also plans to cut 9,000 more employees in the second quarter.
The hopes that Wall Street banks would finally wipe the slate clean with such radical moves drew buyers elsewhere in the sector. Once expected to face a similar crisis as Bear Stearns, Lehman Brothers Holdings rose $1.86, or 4.3 per cent, to $45.50.
Caterpillar rose $6.69, or 8.5 per cent, to $85.28, the largest percentage gainer on the Dow. The maker of construction and excavation equipment said demand from mining and energy customers around the world drove growth, despite a tough economy at home.
Similarly, Honeywell International rose $3.59, or 6.3 per cent, to $60.99 after the industrial manufacturer posted 22 per cent growth in first-quarter profit, helped by demand for its refining and aerospace components.
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"International exposure remains a life saver," said Goldman Sachs equity strategist David Kostin, in a research note. "Similar to recent earnings seasons, stocks with high international sales exposure are witnessing faster and stronger growth outside the US than in the domestic market."
Google and Caterpillar echoed Coca-Cola, Intel and International Business Machines and several other large cap companies that beat expectations with their earnings or outlooks, thanks, in part, to their growth overseas.
"The US looks as if it's going to be more of an export-driven economy...That is the expectation in the market," said Tom Winmill, portfolio manager of Midas Fund, which invests in commodities - especially gold - and their producers.
Oil-and-gas concerns continued their run as crude finished at yet another record high near $117 a barrel, this time spurred by a supply threat in Nigeria. Dow component Chevron added $1.19, or 1.3 per cent, to $93.18. Upward momentum stayed with other commodity producers, too: Canadian fertilizer maker Potash of Saskatchewan rose $10.12, or 5.2 per cent, to $204.67, bringing its gains for the month to date to 32 per cent.
Of the commodities that have surged in value in recent months, Mr Winmill perceives the grains as the most susceptible to an abrupt correction.
"Grains are essentially a renewable resource. You can get a new crop in six months...Planting wheat is a whole different matter to pulling out a little bit of nickel," said Mr Winmill.
Elsewhere, Manpower rose $6.89, or 12 per cent, to $64.36 after the temporary staffer posted an increase in first-quarter profit, helped by international strength.
Out of that order: Wendy's International tacked on 28 cents, or 1.1 per cent, to 25.38 after its directors turned down offers from investor Nelson Peltz' Trian Partners as well as Triarc, parent of the Arby's chain.
Intuitive Surgical plunged $60, or 17 per cent, to $288.50 even after the maker of robotic surgeons boosted its growth expectation below market forecasts. The fresh view for 42 per cent revenue growth was still shy of analyst expectations. |
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