January 19, 2013 in City

GE, Morgan Stanley provide lift

Matthew Craft Associated Press
 

NEW YORK – Better earnings from General Electric and Morgan Stanley helped the stock market inch higher Friday, as major indexes closed out their third straight week of gains.

GE led the 30 stocks in the Dow Jones industrial average after the conglomerate reported stronger quarterly earnings, thanks to orders from Brazil, Angola and other developing countries. Profits increased at all seven of its industrial segments, including oil and gas, energy management, aviation and transportation. GE climbed 74 cents to $22.04.

Even though investors had plenty of news to digest, trading was largely quiet. “Earnings always matter,” said Rex Macey, the chief investment officer of Wilmington Trust Investment Advisors in Atlanta. “But just because we’re in the middle of earnings season doesn’t mean we’re going to get huge market moves.”

This earnings season is off to a good start so far. Of the 67 companies in the S&P 500 that have reported, 43 have trumped analysts’ estimates.

Solid results this week from JPMorgan Chase and others, along with encouraging news on housing and employment, pushed the S&P 500 index to its latest five-year high.

Morgan Stanley’s earnings surged across its many business lines, as more companies hired the investment bank to help raise money and line up mergers. Morgan Stanley gained 8 percent, rising $1.63 to $22.38.

Intel, the world’s biggest chipmaker, said late Thursday that fourth-quarter net income fell 27 percent. A growing preference for smartphones and tablets, instead of personal computers and laptops powered by Intel chips, has made investors wary of the company’s stock. It lost $1.43 to $21.25.

Analysts forecast that companies in the S&P 500 will report a 4 percent increase in fourth-quarter earnings over the year before, according to a report Friday from S&P Capital IQ. They say banks and other financial firms should have the strongest profit growth of any industry. Tech companies like Intel are expected to struggle.

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