US stocks edge higher in afternoon trading amid wave of earnings; GE and Morgan Stanley rise
Major U.S. stock indexes rose in afternoon trading Thursday as investors reacted to quarterly results from a batch of U.S, companies. Google, IBM and insurer UnitedHealth were among the biggest decliners, while General Electric and Morgan Stanley were among the largest gainers.
KEEPING SCORE: The Standard & Poor's 500 index rose four points, or 0.2 percent, to 1,866 as of 1:30 p.m. Eastern Time. The Dow Jones industrial average gained 10 points, or 0.1 to 16,435. The Nasdaq composite added 14 points, or 0.4 percent, to 4,100. U.S. markets will be closed for Good Friday.
EARNINGS, THE GOOD: General Electric described the economic situation as "positive" and said its industrial division was doing well. PepsiCo reported higher income as the company slashed costs and sold more snacks around the world. GE gained 57 cents, or 2.2 percent, to $26.70, while PepsiCo added 63 cents to $85.40.
Goldman Sachs and Morgan Stanley each reported higher income than financial analysts had forecast. Goldman rose 73 cents, or 0.5 percent, to $157.95. Morgan Stanley added 98 cents, or 3.3 percent, to $30.87.
EARNINGS, THE NOT SO GOOD: Google and IBM each posted steep declines after reporting results late Thursday that disappointed investors. Google lost $18.40, or 3.3 percent, to $545.49, and IBM fell $6.44, or 3.3 percent, to $189.99. Mattel fell 59 cents, or 1.5 percent, to $37.29 after the toy maker said weak sales of Barbie dolls and markdowns to clear out inventory from a sluggish holiday season led to an unexpected loss in the first three months of the year.
UNHEALTHY RESULTS: Several large health insurance stocks fell after UnitedHealth Group said its income slid 8 percent in the first quarter as fees and funding cuts from the health care overhaul dented its performance. UnitedHealth shed $2.56, or 3.3 percent, to $75.63. WellPoint slid $3.29, or 3.4 percent to $92.36, while Humana fell $2.72, or 2.5 percent to $106.06. Aetna dropped $1.64, or 2.4 percent to $68.17.
TAKEAWAY: Despite Google, UnitedHealth and other high-profile stocks trading lower on earnings Thursday, the latest wave of quarterly results has been positive, said John Fox, director of research at Fenimore Asset Management.
"The overall read across five or 10 or 15 earnings reports is positive," Fox said, noting that many companies have reaffirmed their earnings forecasts for the year. "The fundamental underpinnings are good, and I'm not hearing anything from management that changes that."
THE ECONOMY: The number of people seeking U.S. unemployment benefits last week rose 2,000 to 304,000. That was less than analysts were expecting and a sign that layoffs aren't increasing rapidly. The number of weekly claims continues to be near pre-recession levels despite the slight increase.
BOND TRADING: Bond prices fell. The yield on the 10-year Treasury note rose to 2.73 percent after reaching 2.63 percent late Wednesday.