US stocks jump after strong profits
Tuesday, April 17, 2012
Stocks stormed higher Tuesday after promising signals about the profitability of U.S. companies and a strong debt auction by Spain. The Dow Jones industrial average rose for the fourth day in five and posted its biggest gain in a month.
European stocks had their best day in four months after Spain, the latest flashpoint in the European debt crisis, attracted strong investor interest at an auction of two-year debt.
Spain’s borrowing costs fell, as measured by the yields on Spanish bonds being traded in the market. In recent days, those yields had risen closer to levels that might force Spain to seek an international bailout.
The Dow Jones industrial average closed up 194.13 points, or 1.5 percent, at 13,115.54. It was up as much as 210 points Tuesday afternoon. The Dow has had only one 200-point rise this year, a gain of 218 points on March 13.
First-quarter results have begun to pour in from companies, and traders have been impressed so far. On Tuesday, Coca-Cola said its first-quarter profit was better than Wall Street analysts had forecast. Goldman Sachs and Johnson & Johnson also posted strong results.
After nine straight quarters of growth, earnings for companies in the S&P 500 index were expected to be roughly flat for the first quarter. The slowdown was expected because of global threats from Europe and China and the difficulty of beating double-digit gains in recent quarters.