S&P 500 posts best week since July as earnings surpass estimates
By Callie Bost Bloomberg News
NEW YORK – The Standard & Poor’s 500 Index posted its best week since July, rebounding from a technology-driven selloff, as corporate earnings from major Wall Street banks to Yahoo! Inc. surpassed estimates.
Morgan Stanley and Citigroup Inc. surged more than 5.6 percent after results beat forecasts. Yahoo soared 11 percent as sales jumped at Alibaba Group Holding Ltd., the China-based e-commerce company it has a 24 percent stake in. Coca-Cola Co. rose the most in five years after sales volume in North America halted a slide and gains were strong in markets such as China. UnitedHealth Group Inc. slid 4 percent after cuts to Medicare pricing hurt results.
The S&P 500 rose four straight days, adding 2.7 percent to 1,864.85 during the holiday-shortened trading week. The Dow Jones Industrial Average climbed 381.79 points, or 2.4 percent, to 16,408.54 for its best week this year.
“There is an intense focus on earnings and how well companies were executing in a challenging first-quarter environment,” Alan Gayle, who helps oversee about $50 billion in assets as a senior strategist at RidgeWorth Capital Management, said in a telephone interview from Atlanta. “The macro environment is expected to improve and it does look like the numbers are moving in that direction. It’s really important that companies continue to be able to execute. The market is not kind to any company that misses expectations.”
More than 10 percent of the companies in the equities benchmark disclosed results in the week, with another 158 members scheduled to report next week. Profit for S&P 500 companies probably increased 0.7 percent in the first quarter, analysts now forecast, after anticipating a 0.9 percent decrease as of April 11.