State of the Union boosts stocks
by Associated Press
Published: January 28,2010
NEW YORK — Stock futures rose today on a flurry of upbeat earnings reports coming a day after President Barack Obama said the government should take new actions to bolster the economy and create jobs.
Overseas markets rose on hopes the U.S. economy will continue to strengthen.
Politics, not the economy, had been dictating trading over the past week. Concerns about Obama’s plan to overhaul banking regulation and restrict trading at large financial institutions spooked the market. The possibility Federal Reserve Board chairman Ben Bernanke wouldn’t be confirmed for a second term had investors on edge, though those worries have subsided. Stocks have declined five of the past eight days.
During his State of the Union address Wednesday night, Obama avoided talking about the banking overhaul plan. Uncertainty over details of how that plan might be enacted and how strong trading restrictions would be had helped push the market to its worst three-day stretch since stocks bottomed last March.
Focus on the economy is creeping back to the forefront. The Fed said Wednesday afternoon it would keep interest rates at historic lows and the economy was showing signs of improvement. That helped stocks rally late in the day.
Investors are turning their attention to a plethora of earnings releases Thursday for signs of further economic improvement. The Labor Department releases its weekly jobless claims report and the Commerce Department provides details on durable goods orders.
Ahead of the opening bell, Dow Jones industrial average futures rose 50, or 0.5 percent, to 10,245. Standard & Poor’s 500 index futures rose 6.60, or 0.6 percent, to 1,101.20, while Nasdaq 100 index futures climbed 6.25, or 0.4 percent, to 1,815.25.
Ford Motor Co. said it recorded a profit in 2009 — its first annual profit in four years. The auto maker, which avoided bankruptcy and government bailout money, said it expects to again be profitable in 2010.
Consumer products makers Colgate-Palmolive and Procter & Gamble Co. both said quarterly sales improved — a sure sign that consumers are returning to stores and still spending on necessary goods. Both companies earnings topped analysts’ expectations.
Pharmaceutical company Eli Lilly & Co. recorded a profit during the fourth quarter as sales of its two top-selling drugs rose sharply.
AT&T’s profit was in line with expectations, though the telecommunications company added a near-record 2.7 million wireless customers.
New requests for unemployment benefits likely fell by 32,000 to 450,000 last week, according to economists polled by Thomson Reuters. High unemployment remains one of the biggest obstacles to a strong economic recovery. Reducing the unemployment rate, now at 10 percent, was one of the focuses of Obama’s speech.
The Labor Department report is due out at 8:30 a.m. EST.
Orders to U.S. factories for big-ticket manufactured goods likely jumped 2 percent in December because of a surge in demand for commercial aircraft. Excluding volatile transportation orders, durable goods orders — items expected to last at least three years — likely rose 0.5 percent last month.
And on Friday, the government releases its initial reading on fourth-quarter gross domestic product. The GDP number, which measures the entire country’s economic output, likely rose at an annualized rate of 4.5 percent during the final three months of 2009.
Stocks closed higher Wednesday after the Fed announcement, erasing losses seen earlier in the day. The Dow rose 0.4 percent, while the broader S&P 500 gained 0.5 percent.
Meanwhile, bond prices fell slightly Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.68 percent from 3.66 percent late Wednesday.
The dollar was mixed against other major currencies, while the price of gold rose.
Overseas, Japan’s Nikkei stock average rose 1.6 percent, while Hong Kong’s Hang Seng climbed 1.6 percent. Britain’s FTSE 100 rose 0.4 percent, Germany’s DAX index was up 0.4 percent, and France’s CAC-40 gained 0.6 percent.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- MDA introduces new 'Mississippi Homecoming' tourism ad campaign
- Crowded field lines up for Jackson mayoral election
- MSU Foundation names five new members
- Another fiberhood qualifies for C Spire 1-gigabit Internet service
- Cochran questions nominee concerning Stanford ponzi scheme
- DMR pays accounting firm more than double contract's worth
- George’s Girls put shopping skills to work
- Reactive Surfaces files lawsuit against Toyota in patent dispute
- Following ruling, Entergy to hand over records to county