Citi, GE earnings help extend rally
NEW YORK – Wall Street found enough in the latest earnings reports to keep its six-week rally alive.
Stocks ended another winning week with a slender advance Friday as earnings from Citigroup Inc. and General Electric Co. came in ahead of the market’s meager expectations.
The numbers weren’t great by normal standards but were good enough to extend a rally that began in early March on signs that the economy might be finding some stability. Citigroup was the fourth bank in a week with news that pointed toward a budding recovery in the industry. But the company, echoing comments from JPMorgan Chase & Co. on Thursday, also said loan losses are expected to continue in the months ahead.
GE, meanwhile, said its first-quarter earnings dropped 36 percent as sales and profits shrank at its GE Capital financial division. The stock edged up 1 percent.
Kent Engelke, chief economic strategist at Capitol Securities Management, said the results placated investors. “If these companies didn’t meet or exceed these expectations, we would have gotten killed,” he said.
Wall Street showed resilience in the first big week of first-quarter earnings reports, weathering disappointments from chip maker Intel Corp. and Google Inc. While investors weren’t happy with Friday’s news, they weren’t caving to uncertainty as they did the first two months of the year, when heavy selling brought the major indexes to 12-year lows.
“I think most people realize there are still causes for concern, but maybe not causes for panic,” said Carl Beck, a partner at Harris Financial Group, a Colonial Heights, Va.-based investment advisory firm.
For the week, the Dow was up 48 points, or 0.6 percent, giving the average six straight up weeks. That’s the longest streak since it rose for seven straight weeks in the period ended May 18, 2007.
The S&P 500 index posted a gain for the week of 1.5 percent, or 13.04. The Nasdaq is up 1.2 percent for the week, or 20.52, and 6 percent for the year.
With the bulk of first-quarter reports still to come in the next two weeks, the market is likely to see some turbulence as investors try to assess company by company how the overall economy is doing. While that tends to be Wall Street’s pattern during any earnings period, the anxiety is particularly heightened right now as investors hope for an end to the recession.
In other trading, the Russell 2000 index of smaller companies rose 5.49, or 1.2 percent, to 479.37.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 2 billion shares.
Bond prices dipped, sending the yield on the 10-year Treasury note up to 2.95 percent from 2.83 percent.
Overseas, Britain’s FTSE 100 rose 1.0 percent, Germany’s DAX index gained 1.5 percent, and France’s CAC-40 rose 1.8 percent. Japan’s Nikkei stock average rose 1.7 percent.