U.S. stocks advance as Alcoa’s sales exceed analyst estimates
STOCKS ROSE IN THE U.S. after sales from Alcoa Inc. exceeded analyst estimates.
BLOOMBERG FILE PHOTO/SCOTT EELLS
By Rita Nazareth Bloomberg News
WASHINGTON - U.S. stocks rose, snapping a two-day drop in the Standard & Poor’s 500 Index, amid earnings optimism after Alcoa Inc. reported sales that exceeded projections.
Alcoa gained 0.9 percent as it sold aluminum at a higher- than-expected price. Constellation Brands Inc. added 2.4 percent after the wine producer reported earnings that beat estimates and raised its profit forecast. MasterCard Inc., the second- biggest U.S. payments network, advanced 1.2 percent after being raised at Goldman Sachs Group Inc. Apollo Group Inc., the biggest U.S. for-profit college, slumped 10 percent after net income dropped amid a decline in new enrollment.
The S&P 500 rose 0.3 percent to 1,461.04 at 9:39 a.m. New York time. The Dow Jones Industrial Average added 48.38 points, or 0.4 percent, to 13,377.23. Trading in S&P 500 companies was 29 percent above the 30-day average at this time of day.
“Alcoa’s report got us off to a good start,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview. “Still, earnings growth is going to be a little bit harder to come by. If we see some good results from bellwether companies, that will definitely give a lift to the market.”
Fourth-quarter profits at S&P 500 companies probably increased 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.
Alcoa, the first company in the Dow to report results, rose 0.9 percent to $9.18. Aluminum prices are rising as demand in China and the U.S. increases while record amounts are being shut away in warehouses as part of financing deals. Alcoa, which said yesterday that global aluminum demand growth will accelerate to 7 percent in 2013, is trying to avoid a downgrade to junk by Moody’s Investors Services. The ratings company said Dec. 18 it was reviewing its rating.
Constellation Brands added 2.4 percent to $36.94. The company reported third-quarter earnings excluding some items of 63 cents a share, beating the average analyst estimate in a Bloomberg survey by 14 percent.
Seagate Technology Plc climbed 3 percent to $32.32. Sales rose to at least $3.6 billion in the fiscal second quarter, exceeding an earlier forecast for $3.5 billion as the company maintained share in the computer hard-drive market.