Wall St cheers bumper results
WALL Street bellwethers cheered investors with a raft of good results last night, pushing up US indices and raising hopes of a sustained economic recovery.
Corporate stalwarts UPS, Caterpillar and 3M all posted double-digit profit growth for the last quarter, while Microsoft surpassed Apple’s recent sales to report a record rise in revenue.
The upbeat results helped catapult the Dow Jones index two per cent higher to 10,323.30. The S&P 500 index closed up 2.3 per cent at 1,093.67, while the Nasdaq rose 2.7 per cent to 2,245.89.
Only 397 stocks fell on the New York Stock Exchange yesterday while 2,675 rose in the biggest rally in two weeks, despite gloomy data on the housing market and jobs.
UPS, the world’s largest delivery company, unveiled a 90 per cent increase in profit for the latest quarter, up to $845m (£554m), and reported earnings per share of 84c – far above analyst forecasts of 77c.
The parcel firm – seen as a barometer of business demand – credited a 40 per cent boost in Asian business for the massive rise, which sent shares soaring 5.2 per cent to $63.99.
Construction equipment maker Caterpillar also topped expectations with a 91 per cent surge in net income to $707m, thanks to expansion in China and Latin America. The impressive results prompted the firm to raise its annual profit forecast by $1bn.
And in a sign of renewed consumer confidence, 3M – which makes everything from Scotch Tape to TV parts – reported a 43 per cent profit increase to $1.12bn for the quarter and upped its profit forecast for the year.
Private equity group Blackstone also surprised analysts by posting $205m net income for the quarter, with a jump in its property portfolio credited for the 12 per cent rise. And the firm raised a greater-than-expected $13.5bn for its new buy out fund, giving it a war chest of $29bn.
There were some gloomy notes, however. Amazon missed its profits target due to rising costs and disappointing sales of its Kindle e-book reader. Shares fell 14 per cent in after-hours trading.
However, other technology firms posted blockbuster revenues. Microsoft smashed expectations with a 48 per cent annual rise in quarterly profits, thanks to massive sales of its new Windows 7 operating system. Its $16bn revenue beat Apple’s results on Tuesday, which chief executive Steve Jobs had described as “phenomenal”.
“It looks really good,” said Jefferies & Co analyst Katherine Egbert. “There’s not a lot not to like.”