Stocks gain, boosted by earnings
NEW YORK (AP) — Stocks moved higher in afternoon trading on Friday, pushing the market toward its biggest weekly gain of the year, as investors assessed more company earnings.
KEEPING SCORE: The Standard & Poor’s 500 index rose nine points, or 0.5 percent, to 1,839 as of 2:18 p.m. Eastern Time. The Dow Jones industrial average rose 125 points, or 0.8 percent, to 16,153. The Nasdaq composite fell three points, or 0.1 percent, to 4,237.
‘SOUP’-ER EARNINGS: Campbell Soup rose $1.91, or 4.7 percent, to $42.88 after the company reported that its second-quarter profit and revenue came in above Wall Street expectations. Campbell Soup also stood by its 2014 forecasts for sales and earnings growth.
MEN’S WEAR BATTLE: Men’s Wearhouse dropped $2.15, or 4.6 percent, to $44.38, after Jos. A. Bank Clothiers, which Men’s Wearhouse had been pursuing, announced a deal of its own. Jos. A. Bank said that it was buying the parent company of Eddie Bauer.
FEELING THE SQUEEZE: Weight Watchers International plunged $8.06, or 26.3 percent, to $22.53 after reporting a big drop in earnings that was worse than analysts’ had been forecasting. The company also issued a weak earnings forecast, saying 2014 would be a “very challenging year.”
FACTORY SLUMP: Harsh winter weather led to a steep drop in U.S. factory output in January. Manufacturers made fewer cars and trucks, appliances, furniture and carpeting, as the recent cold spell ended five straight months of increased production. The Federal Reserve said factory production plunged 0.8 percent in December, reversing gains of 0.3 percent in both December and November.
EUROPEAN OPTIMISM: Investors were also encouraged by a pickup in economic growth in Europe. The bloc of countries that use the euro grew 0.3 percent in the final three months of last year, suggesting that the recovery is getting a foothold, both in the larger economies like Germany and weaker ones like Italy.
An improving economy in Europe “is an important removal of a possible negative for 2014,” said Jim Russell, a regional investment director at US Bank. “Europe will continue to make gradual headway this year.”
THE BIG PICTURE: Stocks have rebounded in February after falling at the start of the year on concern about the outlook for growth in China and other emerging markets. Concern about the U.S. economy also shook the stock market. The S&P 500 has pared its decline for the year to 0.5 percent after falling close to 6 percent at the start of February.
SMUCKER PUNCH: J.M. Smucker, the maker of fruit spreads, peanut butter and syrups, dropped $5.30, or 5.6 percent, to $89.80 after it reported earnings that fell short of analysts’ expectations and lowered its earnings guidance for the year, citing more competitive pricing and unfavorable currency movements.
TREASURYS AND COMMODITIES: The yield on the 10-year Treasury note rose to 2.75 percent from 2.73 percent Thursday. The price of oil dropped 17 cents, or 0.2 percent, to $100.18 a barrel. Gold gained $18.50, or 1.4 percent, to $1,318.60 an ounce.
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