Strong Earnings Spark Stock Rally
Robust profit reports from the likes of Disney and Ford soothed a skittish stock market Tuesday, halting a four-session slump and putting a positive conclusion to a pivotal month back in reach.
The Dow Jones industrial average rose 102.14 to 7,815.08, and the Standard & Poor’s 500 rose 12.11 to 969.06, less than 15 points from record terrain.
Thanks to an absence of any major developments in the economic crisis in Asia or the political crisis at the White House, trading was dominated by company reports on the final three months of 1997.
But, noting that strong fourth-quarter reports had repeatedly failed to ignite any rallies over the past week, analysts suggested that Tuesday’s gains were largely the product of bargain hunting after a four-session slide.
“The good earnings reports, especially by Disney, gave people hope, but the market was just looking for a reason to bounce up,” said Bob Dickey, managing director of technical analysis at Dain Rauscher in Minneapolis.
Advancing issues outnumbered decliners by less than a 3-to-2 margin on the New York Stock Exchange, while advancers barely held the lead on the Nasdaq market, which relied heavily on big gains from bellwethers Intel and Microsoft.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Disney, up 5-3/8 at 102-3/4.
The media conglomerate’s fourthquarter profit rose 18 percent to $755 million on the strength of its theme parks and the films “Flubber” and “Scream 2,” topping Wall Street expectations.
Merck, up 1/2 at 114-1/2.
The drugmaker’s fourth-quarter profit rose 19 percent to $1.24 billion, edging many analyst forecasts.
Procter & Gamble, up 2-3/8 at 80-7/8.
The consumer products company reported that profits increased 11 percent to $1.05 billion for its second quarter ended Dec. 31. The results were in line with expectations.
Ford Motor, up 1-5/8 at 49-7/8.
The automaker’s fourth-quarter profit climbed 50 percent to $1.8 billion, exceeding Wall Street’s estimates.
Boeing, up 9/16 at 45.
The Seattle-based aircraft maker posted a slightly bigger-than-expected loss of $498 million in the fourth quarter.
NASDAQ
Ciena, down 2-13/16 at 51-11/16.
The stock fell for a second day after Ciena announced an agreement to acquire ATI Telecom International, a Canadian provider of services to the telecommunications industry, for $52.5 million in stock.