07.15.09
Stocks Rise Modestly After Goldman’s Strong Profit
The stock market posted modest gains on Tuesday after better-than-expected earnings from Goldman Sachs helped counteract economic reports showing stubborn weakness in crucial areas in retail.
Respectable earnings reports and signs of economic weakness continue to leave investors decidedly ambivalent.
According to preliminary figures, the Dow Jones industrial average rose 27.81 points, or 0.3 percent, to end at 8,359.49. The Standard & Poor’s 500-stock index gained 4.79 points, or 0.5 percent, to 905.84, while the Nasdaq composite index picked up 6.52 points, or 0.4 percent, to 1,799.73.
The stable market action on Tuesday followed a rally on Monday that sent the three indexes up more than 2 percent in anticipation of solid bank earnings.
The news from Goldman, which exceeded analysts’ forecasts with second-quarter profits of $3.44 billion, or $4.93 a share, gave the market a slight bounce before 10 a.m.
Johnson & Johnson, one of the 30 stocks in the Dow industrials, also beat expectations by severely cutting back costs in production, research and wages. But the health care company still reported that its quarterly profits fell by 3.5 percent and its revenue by 7.4 percent as its pharmaceutical division faces mounting competition from generic drug makers quick cash advance.
Investors by midmorning seemed to look past the positive numbers in a Commerce Department report on retail sales as doubts on the consumer environment crept back. The 0.6 percent increase in sales, the biggest gain since January, came mostly from higher energy costs, while key measures of discretionary consumer spending including sales at department stores and restaurants continued to slide unabated.
Overseas, the major European exchanges rose after industrial production figures lifted hopes that Europe may be headed for a recovery. Eurostat, the European Union’s statistics office, said industrial production rose by 0.5 percent in May from the previous month — the first increase in nine months.
In Asia, markets benefited from Wall Street’s rally on Monday. Japan’s benchmark Nikkei 225 stock average rose 211.48 points, or 2.3 percent, to 9,261.81, erasing most of the previous day’s decline, and Hong Kong’s Hang Seng index vaulted 631.10, or 3.7 percent, to 17,885.73.
Oil prices fell modestly on Tuesday. Crude oil for August delivery dropped 28 cents to $59.41 a barrel.
Stocks Rise Modestly After Goldman’s Strong Profit
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