U.S. Stocks Advance on Earnings; Apple, American Express Rally


U.S. stocks rose the most in two weeks after better-than-expected earnings from Apple Inc. and American Express Co. eased concern the housing slump has depressed consumer spending.

Apple climbed the most since January after reporting record sales of Macintosh computers. American Express, the third-largest U.S. credit-card network, gained on higher charges by wealthy customers. Amazon.com Inc. rallied to an almost eight-year high before reporting profit that was lower than some investors anticipated. The shares fell 9.6 percent after the close of exchanges, dragging down index futures.

The Standard & Poor's 500 Index added 13.26, or 0.9 percent, to 1,519.59. The Dow Jones Industrial Average gained 109.26, or 0.8 percent, to 13,676.23. The Nasdaq Composite Index increased 45.33, or 1.7 percent, to 2,799.26, helped by a late-session rally on Research In Motion Ltd.'s alliance with Alcatel-Lucent to distribute the BlackBerry e-mail phone in China.

``If companies are still beating expectations, that's a good backdrop for stocks,'' said Robert Morgan, who helps manage about $10.5 billion at Janney Montgomery Scott LLC in Philadelphia. ``It says good things about the health of the U.S. economy.''

Today's earnings reports helped alleviate concern that the worst housing slowdown in 16 years would cause profits to drop for the first time since 2002. The 170 members of the S&P 500 that reported results as of the close of U.S. exchanges posted an average earnings gain of 4 percent, according to Bloomberg data, topping a 0.6 percent decline forecast by analysts on Oct. 19. Sixty-six percent of them beat analysts' profit estimates.

 


Bloomberg
10/23/2007 6:51:36 PM