TheNigerianVoice Online Radio Center

US STOCKS RISE AS EARNINGS TOP ESTIMATES

By NBF NEWS

United States stocks rose, rebounding from the biggest decline since February, as better-than-estimated results from companies such as Dow Chemical Company, Corning Incorporated and Tyco Electronics Limited. overshadowed concern Europe's debt crisis is spreading.

Bloomberg reported on Wednesday that Dow Chemical, the largest US chemical maker, Corning, the world's biggest maker of glass for flat-panel televisions, and Tyco Electronics, the world's biggest maker of electronic connectors, advanced after profits topped analyst forecasts. Goldman Sachs Group Inc. jumped 1.9 per cent, leading banks to the largest gain in the Standard & Poor's 500 Index, after defending securities practices at a US Senate hearing.

The S&P 500 increased 0.4 per cent to 1,187.95 at 10:16 a.m. in New York. The Dow Jones Industrial Average climbed 20.55 points to 11,012.54, while the Nasdaq Composite Index slipped 0.1 per cent to 2,469.89.

'Earnings season is going exceptionally well,' said David Katz, chief investment officer at Matrix Asset Advisors Inc. in New York, which manages $1.2bn. 'A better economy and better earnings should continue to drive the market higher as the year progresses.' Europe 'is going to muddle through' its debt crisis.

About 80 per cent of S&P 500 companies that have posted first-quarter earnings have topped analysts' projections, according to data compiled by Bloomberg. Profit estimates for companies in the index rose 9.1 per cent on average in April, twice the gain in prices and the largest monthly increase since at least 2006.

Federal Reserve policy makers meeting today may not be impressed enough with the surge in US corporate profits to change their view that interest rates need to stay near a record low to keep the recovery going. Combined net income for S&P 500 companies that have reported first-quarter results is up 46 per cent from a year earlier after a 96 per cent jump in the fourth quarter, according to Bloomberg data.

The S&P 500 yesterday dropped 2.3 per cent after S&P downgraded its ratings on Greek debt to junk and cut Portugal's two levels as contagion from Greece spread through the euro region, which combined makes up the world's second-largest economy behind the US. The main benchmark for America equities ended last week at the highest level since September 2008.

Greece and Portugal's credit downgrades yesterday are no reason to doubt forecasts for profit growth exceeding 50 per cent at Standard & Poor's 500 Index companies through 2011, said Kenneth Fisher, who oversees about $39 bn as chairman of Fisher Investments. Almost $1trn of global equity value was erased on concern rising public debt will spur defaults, derailing the global economy, data compiled by Bloomberg show.