Stocks Rise as Earnings Beat Expectations

Strategic Insights -

Markets staged a strong comeback on Wednesday, led by optimism over quarterly earnings reports from prominent companies like Ford Motor Co. and Intel Computer Corp. The Dow Jones industrial average climbed 30.64, while the Standard & Poor's 500 added 10.73. The Nasdaq composite rose 31.52.

Companies across various industries reported earnings that surpassed expectations, fueling optimism about future quarters. Marc Klee, a money manager at American Fund Advisors, noted that the results for the third quarter have been "as good or better than expected." Notable companies that topped earnings expectations include Compaq Computer Corp., Apple Computer Inc., Time Warner Inc., Intel, and Ford.

Key Takeaways:

  • Ford Motor Co. reported earnings of 80 cents a share in the third quarter, beating estimates by a penny.
  • Financial services companies, such as Citigroup Inc. and American Express Co., led the S&P 500's gain, with Citigroup's stock rising 25/32.
  • Intel, the world's No. 1 chipmaker, reported stronger-than-expected third-quarter earnings but warned that fourth-quarter sales will rise only slightly.
  • Microsoft Corp. gained 33/4 to 100 3/16 after reporting quarterly earnings that fell less than expected.
  • Compaq Computer Corp. rose 1 to 251/2 after reporting that quarterly earnings fell less than expected.
  • Apple Computer Inc.'s shares have nearly tripled this year due to strong sales of its iMac computer.

Statistics:

  • Dow Jones industrial average rose 30.64.
  • Standard & Poor's 500 gained 10.73.
  • Nasdaq composite rose 31.52.
  • Ford Motor Co. earnings: 80 cents a share.
  • Compaq Computer Corp. quarterly earnings: less than expected.
  • Intel third-quarter earnings: stronger than expected despite warning of slow fourth-quarter sales.
  • Microsoft Corp. quarterly earnings: fell less than expected.
  • Apple Computer Inc. profit: 68 cents a share, 19 cents better than forecasts.

Sources:

  • [American Fund Advisors]
  • [American Express Co.]
  • [Intel Computer Corp.]
  • [Compaq Computer Corp.]
  • [Time Warner Inc.]
  • [Ford Motor Co.]
  • [Citigroup Inc.]
  • [Aeltus Investment Management]
  • [Microsoft Corp.]
  • [Apple Computer Inc.]
  • [BankAmerica Corp.]
  • [Bankers Trust Corp.]