Article – BusinessDesk
Jan 30 (BusinessDesk) Better-than-expected profit outlooks from drug makers Pfizer and Eli Lilly bolstered Wall Street, while a rise in US home prices also underpinned optimism that the economic recovery is kicking into gear.
While you were sleeping: Pfizer, Eli Lilly lift mood
Jan 30 (BusinessDesk) – Better-than-expected profit outlooks from drug makers Pfizer and Eli Lilly bolstered Wall Street, while a rise in US home prices also underpinned optimism that the economic recovery is kicking into gear.
Shares of Pfizer gained, last up 3.1 percent, after the company predicted 2013 profit that surpassed expectations. So did Eli Lilly, boosting its shares 3.8 percent.
Of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, according to Thomson Reuters data.
There was bright news on US house prices, which posted their biggest annual gain since 2006. The S&P/Case Shiller composite index of 20 metropolitan areas increased 0.6 percent in November on a seasonally adjusted basis, and jumped 5.5 percent year over year, the most since August 2006.
“What we’re seeing is really a gradual improvement in the overall economy,” Anthony Chan, chief economist for Chase Private Client in New York, told Reuters.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.52 percent, while the Standard & Poor’s 500 Index gained 0.12 percent. The Nasdaq Composite Index slipped 0.10 percent. Earlier the Dow rose as high as 13,954.04, the highest level in five years.
And that optimism also helped fuel a gain in oil prices to the highest level in four months.
“We’re pricing in a lot of economic optimism,” Mike Wittner, head of oil-market research for the Americas at Societe Generale in New York, told Bloomberg News. “The underlying macroeconomic picture looks solid and that’s good for demand.”
Even so, consumer confidence slumped in January, declining to the lowest level since November 2011, with the Conference Board’s index sliding to 58.6 this month, from a revised 66.7 in December.
It wasn’t all good news on the earnings front either. Shares of VMware plunged, last down 20.9 percent, after the software maker predicted first-quarter revenue that fell short of expectations.
Seagate also missed the mark in its revenue outlook, sending its shares 9.5 percent lower.
US Federal Reserve policy makers began a two-day meeting today.
“The Fed meeting will be as always very closely watched,” Hank Smith, who helps oversee US$6.5 billion as chief investment officer of Haverford Trust told Bloomberg. “The market’s going to be very curious and read into any commentary as to if the Fed lets on as to when this non-traditional easing will start to end.”
In Europe, the Stoxx 600 Index ended the day with a 0.3 percent advance from the previous close. It’s at the highest level in nearly two years. Stocks in London, Frankfurt, and Paris also gained, rising 0.7 percent, 0.2 percent and 0.1 percent respectively.