NEW YORK — Stocks are rising Wednesday morning following a crop of strong fourth-quarter earnings reports from companies including IBM, consumer products maker Proctor & Gamble, and manufacturer United Technologies. That’s helping indexes recover a chunk of their losses from the day before. Bond prices turned lower and yields rose.
KEEPING SCORE: The S&P 500 index gained 18 points, or 0.7 per cent, to 2,651 as of 10 a.m. Eastern time. The Dow Jones Industrial Average jumped 269 points, or 1.1 per cent, to 24,673. The Nasdaq composite rose 58 points, or 0.8 per cent, to 7,078. The Russell 2000 index of smaller-company stocks added 10 points, or 0.7 per cent, to 1,467.
EARN, BABY, EARN: IBM rocketed toward its biggest gain in 10 years after its fourth-quarter results surpassed Wall Street estimates. Investors were also pleased with the company’s forecasts for 2019. BMO Research analyst Keith Bachman said critical operations including IBM’s business and technology services divisions did well in the quarter. The stock jumped 9.2 per cent to $133.95, which put IBM on track for its largest gain since January 2009. The stock sank 25 per cent in 2018.
Tide, Bounty and Crest maker Procter & Gamble rallied 6 per cent to $95.89 after its profit came out ahead of expectations and its sales were well above analyst forecasts as well. The company said its annual profit and sales could be slightly stronger than it previously expected.
Elevator and jet engine maker United Technologies rose 6.2 per cent to $118 following its report, while media company Comcast jumped 6.4 per cent to $37.21 after it picked up more internet subscribers and got a revenue boost from Sky, its big bet on European TV.
U.S. company profits got a big boost in 2018 after the passage of the Republican-backed corporate tax cut. While the law lowered corporate tax rates permanently, it contributed to a one-time increase in profit growth. A period of strong global economic growth also helped company profits last year, although that has been fading.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.76 per cent from 2.73 per cent.
U.S-CHINA RELATIONS: White House economic adviser Larry Kudlow denied reports by media outlets including the Financial Times and CNBC saying the U.S. had turned down an offer by Chinese trade officials to meet in Washington this week, due to a lack of progress on issues such as protection of intellectual property. Kudlow said both sides are working toward the higher-level talks. The reports, citing unnamed sources close to the matter, said the discussions were meant to pave the way for meetings between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer next week.
ENERGY: U.S. crude oil slipped 0.1 per cent to $52.94 per barrel in New York. Brent crude, used to price international oils, gained 0.3 per cent to $61.71 per barrel in London.
OVERSEAS: France’s CAC 40 gained 0.4 per cent and the German DAX rose 0.2 per cent. Britain’s FTSE 100 lost 0.5 per cent.
Japan’s Nikkei 225 index shed 0.1 per cent after the Bank of Japan kept its short and long term interest rates intact as expected, but lowered its inflation forecasts. South Korea’s Kospi rose 0.5 per cent and Hong Kong’s Hang Seng was almost flat.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
Annabelle Liang contributed to this story from Singapore.
Marley Jay, The Associated Press