US stocks edge higher

Wall Street drifted to a modestly higher finish today as investors sought bargains after last week’s selloff and disappointing earnings in the financial sector raised fresh concerns about corporate profits.

Wall Street drifted to a modestly higher finish today as investors sought bargains after last week’s selloff and disappointing earnings in the financial sector raised fresh concerns about corporate profits.

Surprisingly strong results from Ford Motor followed by an extensive restructuring announcement kept buyers in the market despite another sub-par earnings report from a bank, this time from Bank of America Corp.

Yet despite the gains, there was a sense of increasing sobriety on Wall Street after Friday’s 213-point drop in the Dow Jones industrial average, and trading was light and erratic.

But the fact that the markets did not dramatically continue Friday’s selling was a good sign of investor confidence, analysts said.

“You’re seeing a little bit of buying come in today, which you’d expect after a selloff,” said Jay Suskind, head trader at Ryan Beck & Co. “The market is looking at what happened Friday rationally, and now it’s just a wait-and-see on how other bellwether companies do on their earnings.”

The Dow rose 21.38, or 0.2%, to close at 10,688.77.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index added 2.33, or 0.18%, to close at 1,263.82, and the Nasdaq composite index gained 0.77, or 0.03%, to finish on 2,248.47.

Bonds were little changed after a morning selloff, with the yield on the 10-year Treasury note rising to 4.36% from 4.35% on Friday. The dollar was mixed against other major currencies, while gold prices edged lower.

Crude oil prices fell despite continued tensions in the Middle East and Nigeria. A barrel of light crude settled at 68.10, down 38 cents, on the New York Mercantile Exchange.

In a light week for economic data, investors were disappointed in the Conference Board’s latest index of leading economic indicators for December, which rose just 0.1%. The index, a measure of future economic growth, was expected to rise 0.2% after an 0.5% rise in November.

That left the focus on earnings, and Ford delivered enough optimism to help Wall Street recover from Friday’s selloff. The automaker said improved profits from its luxury brands and the sale of its Hertz rental car division helped deliver earnings that beat Wall Street estimates by 7 cents per share.

Ford, which said it would cut up to 30,000 jobs as part of a restructuring effort, rose 42 cents to 8.32.

Bank of America fell 23 cents to 43.96 after it became the latest major bank to miss analysts’ earnings forecasts. The US’s second-largest bank by assets posted a drop in profits from the fourth quarter of 2004, and said weaker trading and increased consumer bankruptcies ate into earnings.

The company missed earnings forecasts by 8 cents per share.

“If you roll back the tape to past quarters, you’ll find the same amount of fevered worry about whether or not companies would meet the numbers and whether earnings would be decent, and that kept stocks down at those times,” said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. “Once again, we’re sceptical about earnings, and that puts a damper on the market short-term.

But there’s still some potential for some decent surprises and upside from here.”

Some, however, felt last week’s selloff was overdone. Analysts at Bear Stearns upgraded Yahoo to ”outperform” from “peer perform,” saying last week’s downturn in the stock, prompted by the company’s missed earnings projections, overlooked the fact that the internet services company was still very profitable. Yahoo gained 43 cents to 34.17.

In merger news, Albertsons added 1.31 to 25.43 after it agreed to be purchased for 9.7 billion by a consortium of investors led by Supervalu Inc, CVS and a private equity firm. The buyers will also assume 7.7 billion in debt. Supervalu climbed 2.13 to 33.98, while CVS slipped 17 cents to 26.96.

Advancing issues outnumbered decliners by about 7 to 4 on the New York Stock Exchange, where volume totalled 1.66 billion shares, compared with 2.13 billion traded on Friday.

The Russell 2000 index of smaller companies rose 3.22, or 0.46%, to 707.82.

More in this section

Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Our Covid-free newsletter brings together some of the best bits from, as chosen by our editor, direct to your inbox every Monday.

Sign up