By Steve Rothwell AP Markets Writer
May 1, 2014
NEW YORK (AP) — Stocks are rising Tuesday as more U.S. companies report solid earnings. Ameriprise soared after the financial planning company announced strong quarterly results and said it would buy back more of its own stock.
KEEPING SCORE: The S&P 500 index rose nine points, or 0.5 percent, to 1,878 as of 3 p.m. Eastern time. The Dow Jones industrial average gained 100 points, or 0.6 percent, to 16,549. The Nasdaq composite rose 34 points, or 0.8 percent, to 4,108.
BUY BACK AND BEAT: Ameriprise rose $5.80, or 5.6 percent, to $109.35. It reported first-quarter earnings that exceeded Wall Street’s expectations and announced that its board had authorized the repurchase of an additional $2.5 billion in stock.
DIESEL POWER: Cummins, a maker of large diesel engines, rose $5.02, or 3.5 percent, to $150.24, after its first-quarter earnings beat analysts’ expectations. Its revenue in North America rose 25 percent.
THE EARNINGS GAME: About half of the companies in the S&P 500 have reported earnings so far, according to data from S&P Capital IQ. Earnings are currently expected to grow by 1.4 percent in the period, compared with growth of 5.2 percent in the same period as a year earlier, and almost 8 percent in the fourth quarter.
Investors’ expectations have risen as more companies report results. Two weeks ago, companies were expected to report a decline in earnings.
“Companies have learned a new religion,” said Chris Bertelsen, chief investment officer at Global Financial Private Capital, a wealth management company. “That is, underpromise and overdeliver.”
KORS FOR CONCERN: Coach fell $4.29, or 8.5 percent, to $46.12 after the maker of luxury handbags and other accessories said earnings declined in the first three months of the year. Sales in North America came under pressure from competitors like Michael Kors.
FED MEET: The Federal Reserve starts a two-day policy meeting on Tuesday. Most economists expect the Fed will further reduce its bond purchases by $10 billion to $45 billion a month. The Fed’s stimulus has helped underpin a five-year rally in stocks.
ENERGY GAINS: Consol Energy led stocks of energy companies higher. Consol Energy rose $2.07, or 4.9 percent, to $44.02 after it announced earnings of $116 million in the first quarter. The company’s profit was helped by growth in its oil and gas business.
THE HOUSE ALWAYS WINS: MGM Resorts International rose $2.04, or 8.9 percent, to $25.06 after the company said its first-quarter earnings soared, bolstered by continued strength in Macau and improved room bookings on the Las Vegas Strip.
TREASURYS AND COMMODITIES: The yield on the 10-year Treasury note was unchanged from Monday at 2.70 percent. The price of oil rose 44 cents, or 0.4 percent, to $101.28 a barrel.