US stocks gain for fourth straight week

  • 24/10/2015
A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange (Reuters)
A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange (Reuters)

By John Biers

Surging tech earnings, a McDonald's comeback and a partnership between Oprah Winfrey and Weight Watchers have helped push US stocks to their fourth straight week of gains.

The S&P 500, erasing the memories of a horrendous third quarter, gained 42.04 points (2.07 percent) to close at 2,075.15 on Friday, moving back into positive territory for 2015.

The Dow Jones Industrial Average rose 430.73 (2.50 percent) to 17,646.70, while the tech-rich Nasdaq Composite Index advanced 145.17 (2.97 percent) to 5,031.86.

The gains followed a heavy week of earnings that crossed just about every major sector of the US economy.

Results overall were mixed, with some prominent disappointments and numerous big companies reporting lower revenues. But there were enough standout results from Microsoft, General Motors and others to keep the momentum rolling.

Stocks were also propelled by additional Central Bank largesse. The People's Bank of China cut benchmark interest rates and European Central Bank chief Mario Draghi hinted at additional monetary stimulus in response to deflation worries.

"The juice is loose," the title of a note from FXCM said. "Central Banks Catapult Stock Prices Higher (Again)."

But some were questioning how much longer the rally could go.

"You're going to need new news," Art Hogan, chief market strategist at Wunderlich Securities, said.

"I would expect we either grind sideways, or give some back next week."

Big winners in the earnings parade included Google parent Alphabet, which rode hot trends in mobile search and streaming video to huge profit gains; Amazon, which scored a surprise third-quarter profit based on surging sales; and Microsoft, which reported higher earnings based in part on the success of cloud-based software.

Strong results also came from companies in other sectors: General Motors bested earnings expectations on strong US sales; American Airlines and United Airlines parent United Continental reported record profits, due in part to lower fuel costs; and McDonald's showed signs of life, reporting its first positive US comparable sales in two years after launching all-day breakfast and a new "deluxe" buttermilk chicken sandwich.

Big losers included IBM, Yahoo, Harley-Davidson, Chipotle Mexican Grill and Pandora Media, which slumped 35.4 percent following disappointing reports on Friday.

Among the flashiest non-earnings stories, talk-show host Oprah Winfrey announced a 10 percent stake in Weight Watchers International and joined the company's board, helping shares to more than double.

Legendary Italian racing car Ferrari brought its trademark roar to Wall Street, rising solidly in its first day of trade after its initial public offering. The company's ticker is "RACE".

AFP

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