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Semiconductor industry

Blue Chip Stocks Surge on Strong Earnings Reports

Strategic Insights

— 2 min read

The US stock market experienced a significant boost on Wednesday as major blue chip companies, such as General Motors, Intel, and Merck, reported impressive earnings, leading to the Dow Jones Industrial Average reaching its highest level in over six years. Among the top performers was General Motors, which saw its stock jump 9.6% to $22.55, exceeding analysts' expectations and demonstrating the company's progress in its recovery efforts.

General Motors' first-quarter loss of $323 million was smaller than predicted, and the company would have made a profit if not for special items and healthcare charges. Motor analyst Chris Ceraso of Credit Suisse pointed out that excluding these items, General Motors would have made a small profit in the quarter. Ford Motor's shares rose 3.4% to $7.99, despite not yet reporting its quarterly results.

Meanwhile, Merck's quarterly profit increased by 11%, exceeding forecasts, and the company raised its full-year outlook, causing its stock to rise by 2% to $35.08. Apple Computer's shares also rose 1.8% to $66.83, thanks to the company's 41% increase in second-quarter revenue to $410 million. Intel's slight rise to $19.46 was driven by its first-quarter results beating analysts' expectations.

The NASDAQ Composite index, however, fell 0.4% to 2,362.17, due largely to a significant decline in Ebay's stock price. Ebay's 8.4% drop to $36.96 was driven by the internet auction group's announcement of lower-than-expected sales and profits for 2006.

Key Takeaways:

  • General Motors' first-quarter loss was smaller than predicted, with the company narrowly missing a profit if not for special items and healthcare charges.
  • Merck's quarterly profit increased by 11% and the company raised its full-year outlook, pushing its stock up.
  • Apple Computer's second-quarter revenue rose by 41% to $410 million, driving a 1.8% increase in its share price.
  • Intel's first-quarter results exceeded analysts' expectations, with the company's stock edging up to $19.46.
  • Ebay's stock price plummeted 8.4% due to the company's announcement of lower-than-expected sales and profits for 2006.
  • The sell-off in energy stocks, including a drop of 0.8% in the Amex oil index, was driven by a dip in crude prices.
  • Bank of America reported a 14% increase in first-quarter profits, due to growth in consumer and investment banking.

Statistics:

  • General Motors' stock price rose by 9.6% to $22.55.
  • Merck's quarterly profit increased by 11% to $35.08.
  • Apple Computer's second-quarter revenue rose by 41% to $410 million.
  • Intel's first-quarter results exceeded analysts' expectations, with the company's stock edging up to $19.46.
  • Ebay's stock price fell 8.4% to $36.96.
  • Bank of America's first-quarter profits rose 14%.

Sources:

  • Bloomberg
  • Dow Jones Industrial Average
  • Merck's press release
  • Apple Computer's press release
  • Intel's press release
  • Bank of America's press release

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