Stocks Rally on Lower Oil Prices and Strong Earnings

Markets surged yesterday, driven by declining oil prices and solid earnings reports from top companies, pushing the Standard & Poor's 500-stock index towards its best month since 2003. The rally was led by Comcast, the cable operator, which exceeded analysts' forecasts and contributed to the Nasdaq composite index reaching a five-year high. Aetna, the health insurer, also reported a significant gain after raising its full-year earnings forecast. The market's optimism is attributed to investors adjusting their expectations in response to lower energy prices.

Key Takeaways:

• The S.& P. 500 rose 6.86 points, or 0.5 percent, to 1,389.08, with the index experiencing its biggest monthly gain since December 2003.
• Media and telephone stocks, buoyed by Comcast's earnings, led the market's gains, with Clear Channel Communications rising after it announced the possibility of a sale.
• The Dow Jones industrial average increased 28.98 points, or 0.24 percent, to 12,163.66, reaching a fourth consecutive record despite Boeing and General Motors falling.
• The Nasdaq advanced to a five-year high, rising 22.51 points, or 1 percent, to 2,379.10, a level not seen since February 2001.
• As of Wednesday, with about half the companies in the S.& P. 500 reporting earnings, 73 percent have posted profits that exceeded analyst forecasts, while 12.5 percent reported results that trailed estimates.
• The number of companies beating earnings estimates is significant, indicating a strong performance by stocks.
• Lower oil prices, with the December contract for crude oil falling 1.7 percent to $60.36 a barrel, contributed to the market's gains.
• Comcast's strong earnings and new customer additions helped drive gains in broadcast and telecommunications stocks.

Statistics:

• S.& P. 500 rose 6.86 points, or 0.5 percent, to 1,389.08.
• Dow Jones industrial average increased 28.98 points, or 0.24 percent, to 12,163.66.
• Nasdaq advanced 22.51 points, or 1 percent, to 2,379.10.
• 73 percent of companies in the S.& P. 500 have exceeded analyst earnings forecasts.
• 12.5 percent of companies in the S.& P. 500 have trailed analyst earnings estimates.
• The number of companies beating earnings estimates is a significant indicator of market performance.
• Crude oil prices fell 1.7 percent to $60.36 a barrel.
• Exxon Mobil rose 61 cents, to $71.62, on strong earnings.
• Clear Channel Communications rose $3.13, to $35.48, after announcing a possible sale.
• Sprint added $1.18, to $18.90, despite losing 188,000 customers with monthly contracts.

Sources:

• Bloomberg Financial Markets
• The Associated Press
• Thomson Financial
• Labor Department
• Commerce Department
• Bloomberg News survey