Feb 13 (BusinessDesk) – Wall Street advanced amid better-than-expected earnings from companies including Avon Products as investors await fresh clues on President Barack Obama's plans to fuel the recovery of the world's largest economy in his State of the Union address tonight.
Avon Products and Michael Kors Holdings were among the companies reporting better-than-expected earnings, lifting their shares 20 percent and 11 percent respectively.
However, Coca-Cola's sales disappointed, sending the stock down 2.5 percent.
Of the 353 companies in the Standard & Poor's 500 Index that have reported earnings, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters according to Thomson Reuters data through Tuesday morning.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.32 percent, the S&P 500 gained 0.15 percent, while the Nasdaq Composite Index eked out a 0.02 percent gain.
The S&P 500 Index is 6.5 percent stronger than at the start of the year, closing at a five-year high on Friday, which has made many analysts weary of the further gains though investors show confidence.
"Every strategist I’ve talked to says that we’re due for a 5 percent, 7 percent correction, and the reason why haven’t seen it is because investors are buying on dips,” Diane Jaffee, the New York-based group managing director for US equities who oversees about US$5.9 billion in assets at TCW Group, told Bloomberg News.
“The thought process is that people are willing to forgo the first 10 or 20 percent of the market rise to make sure it will really do it, and now they want in for the last 20 or 30 percent because they have more confidence,” Jaffee said.
Shares of Dell rose, last up 0.8 percent at US$13.81, after shareholder T Rowe Price Group said it won’t support the proposed US$24.4 billion buyout of the computer maker.
“We believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward,” Brian Rogers, chairman and chief investment officer of T Rowe, the No. 2 outside investor in Dell, said today in an e-mailed statement from Baltimore, Bloomberg reported.
In Europe, the Stoxx 600 Index finished the day with a 0.5 percent climb from the previous close.
National benchmark indexes also gained in London, Paris and Franfurt, gaining 1 percent, 1 percent and 0.4 percent respectively.
Among the gainers was Barclays after the company announced plans to axe 3,700 jobs, boosting the stock 8.6 percent in London, as part of an effort to slash the British bank's yearly costs by 1.7 billion pounds.
In other news, the G7 issued a statement reaffirming the group's commitment to letting markets determine the value of individual currencies amid increasing talk of currency wars linked to efforts by some of the world's biggest central banks to bolster liquidity by aggressively buying government bonds.
The G7 statement comes days before G20 finance ministers and central bankers meet in Moscow ahead of a G20 leaders' summit in the Russian capital later in the year.