April 23, 2011 in Business

Earnings reports bolster stocks

Matthew Craft And David K. Randall Associated Press
 

NEW YORK – Strong earnings reports from big companies including Apple Inc. and UnitedHealth Group Inc. lifted stocks across the market Thursday. (Markets were closed Friday for the Good Friday holiday.)

The Dow Jones industrial average closed at 12,505.99 – another 2011 high.

“There are a lot of concerns out there, but investors are looking at the bottom line right now, and that’s earnings,” said Yu-Dee Chang, the chief trader at ACE Investment Strategists, a money management firm based in Virginia.

The Standard & Poor’s 500 index climbed to 1,337.38. The S&P 500, a benchmark for most mutual funds, is now less than 6 points away from its highest close of 2011.

The gains were broad. All 10 company groups that make up the S&P index rose, led by a nearly 1 percent gain in technology companies.

Apple Inc. rose nearly 3 percent after reporting sales and income late Wednesday that came in way ahead of analysts’ estimates. The company sold 18.7 million iPhones in the latest quarter, millions more than expected. Verizon Wireless started selling the phones in February, ending three and a half years of exclusivity by AT&T Inc.

The Travelers Companies Inc. rose nearly 4 percent, leading the 30 companies in the Dow average, after reporting stronger earnings and a 14 percent dividend increase. The commercial insurer benefited from a drop in losses from catastrophe claims and more companies buying insurance.

UnitedHealth jumped 8 percent after the health insurer said profits rose 13 percent as more employees signed up for coverage.

The stronger earnings results were tempered by weaker-than-expected economic reports. The Labor Department said Thursday that the number of people who applied for unemployment benefits fell last week to 403,000. Economists had expected a larger drop. A separate report from the Federal Reserve Bank of Philadelphia found that manufacturing activity in the Philadelphia area fell in April.

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