Market Wrap: Stocks Up as Street Sees Beyond Mixed Earnings

Reuters
Updated
Markets Open After Dow Takes Late Week Plunge
Spencer Platt/Getty Images

By Noel Randewich

U.S. stocks ended stronger Wednesday as Visa's potential expansion into China and talk of a turnaround at McDonald's helped investors look beyond a mixed bag of quarterly earnings.

All of the 10 major S&P 500 sectors rose, with the tech index gaining 1.09 percent, propelled by Visa and MasterCard.

Visa (V) ended 4.1 percent higher at $68.01 after hitting a record high of $69.98, while MasterCard (MA) closed up 3.9 percent after China said it would open up its market to foreign firms for clearing domestic bank card transactions.

%VIRTUAL-pullquote-We're sorting through earnings. It's mixed, but there's no drastic change to the general economic recovery.%McDonald's (MCD) surged 3.1 percent after it said it was working on a plan to reverse its shrinking sales.

A week ago, more than 80 percent of the S&P 500 companies to have posted their March-quarter earnings had beaten estimates. But with 121 reports now in, that number has slipped to 71.9 percent -- just above the 70 percent earnings beat rate seen over the past four quarters. Many have blamed misses on revenue on a strong dollar for making their products more expensive overseas.

"We're sorting through earnings. It's mixed, but there's no drastic change to the general economic recovery." said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta.

Major Index Make Gains

The Dow Jones industrial average (^DJI) rose 88.68 points, or 0.49 percent, to end at 18,038.27. The Standard & Poor's 500 index (^GSPC) gained 10.67 points, or 0.51 percent, to 2,107.96 and the Nasdaq composite (^IXIC) added 21.07 points, or 0.42 percent, to 5,035.17.

The Nasdaq composite is now just 13 points shy of its record high close, set in March 2000, that signaled the limit of the dot-com bubble.

"I do think there are valuation concerns, and some tech companies are trading at extremely high multiples," said Derek Hoyt, chief investment officer at Minneapolis-based KDV Wealth Management, adding he doesn't believe valuations warrant a major selloff.

Beyond earnings, Wall Street remains motivated to invest in stocks due to the Federal Reserve's low interest-rate policy, he said.

Yum Brands (YUM) ended 4 percent higher after the restaurant operator said late Tuesday it was recovering from a meat scare in China and expected a strong year-end finish.

After the bell, eBay (EBAY) was up 4.3 percent after it posted March-quarter earnings above estimates and said its growth was hurt by the strong dollar.

On Wednesday, advancing issues outnumbered declining ones on the NYSE by 1,737 to 1,230, for a 1.41-to-1 ratio; on the Nasdaq, 1,483 issues rose and 1,267 fell for a 1.17-to-1 ratio favoring advancers.

The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq composite recorded 94 new highs and 33 new lows.

About 6 billion shares changed hands on U.S. exchanges, below the 6.2 billion daily average for the month to date, according to BATS Global Markets.

What to watch Thursday:

  • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.

  • At 10 a.m., the Commerce Department releases new home sales for March, and Freddie Mac releases weekly mortgage rates.

Earnings Season
These selected companies are scheduled to release quarterly financial results:

  • 3M (MMM)

  • AbbVie (ABBV)

  • Alaska Air Group (ALK)

  • Altria Group (MO)

  • Amazon.com (AMZN)

  • American Electric Power (AEP)

  • BankUnited (BKU)

  • Baxter International (BAX)

  • BB&T (BBT)

  • Cabela's (CAB)

  • Capital One Financial (COF)

  • Carlisle Companies (CSL)

  • Caterpillar (CAT)

  • Chicago Bridge & Iron (CBI)

  • Chubb (CB)

  • City National (CYN)

  • Deluxe (DLX)

  • DeVry Education Group (DV)

  • Domino's Pizza (DPZ)

  • Dow Chemical (DOW)

  • Dr Pepper Snapple Group (DPS)

  • Dunkin' Brands Group (DNKN)

  • E-Trade Financial (ETFC)

  • Eli Lilly (LLY)

  • Ericsson (ERIC)

  • Fair Isaac (FICO)

  • Federated Investors (FII)

  • First American (FAF)

  • General Motors (GM)

  • Google (GOOGL) (GOOG)

  • Hanesbrands (HBI)

  • Hershey (HSY)

  • Janus Capital Group (JNS)

  • Jarden (JAH)

  • Johnson Controls (JCI)

  • Juniper Networks (JNPR)

  • KKR & Co. (KKR)

  • Lazard Ltd. (LAZ)

  • Microsoft (MSFT)

  • Nasdaq OMX Group (NDAQ)

  • Newmont Mining (NEM)

  • Novartis AG (NVS)

  • Pandora Media (P)

  • Pepsico (PEP)

  • Polaris Industries (PII)

  • Principal Financial Group (PFG)

  • Procter & Gamble (PG)

  • PulteGroup (PHM)

  • Quest Diagnostics (DGX)

  • Raytheon (RTN)

  • Reinsurance Group of America (RGA)

  • Robert Half International (RHI)

  • Snap-On (SNA)

  • Southwest Airlines (LUV)

  • Stanley Black & Decker (SWK)

  • Starbucks (SBUX)

  • Synaptics (SYNA)

  • Union Pacific (UNP)

  • United Continental Holdings (UAL)

  • VeriSign (VRSN)

  • W.R. Grace & Co. (GRA)

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