By Kristina Peterson
U.S. stocks rose Thursday, buoyed by encouraging earnings from
energy companies and a drop in jobless claims.
A round of better-than-expected quarterly reports, strong
European economic data and a decline in initial jobless claims
helped investors find confidence Thursday morning, after the market
struggled to find direction during Wednesday's trading.
The Dow Jones Industrial Average (DJI) climbed 79 points, or
0.8%, to 10578, in early trading.
Leading the measure, Walt Disney (DIS) gained 1.7% amid
speculation that the company was close to signing ABC Family
President Paul Lee to fix its ailing ABC network, people familiar
with the matter told the Wall Street Journal.
Exxon Mobil (XOM) gained 1.5% after its second-quarter earnings
jumped a bigger-than-expected 91%. The oil giant rebounded from the
prior year's weak performance on higher commodities prices and
improved refining margins.
Drug companies also strengthened. Pfizer (PFE) gained 1.5%,
while Merck (MRK) advanced 1.3%. Astra Zeneca (AZN), not a Dow
component, rose 1.3% after lifting its full-year financial targets
and doubled its 2010 share buyback programme after reporting
second-quarter profits that beat forecasts.
However, Procter & Gamble (PG) slid 1%, following
disappointing quarterly reports from several other
consumer-oriented companies. Colgate-Palmolive (CL) slid 5.5% after
its second-quarter earnings rose 7.3%, but sales missed analysts'
expectations. Kellogg's (K) second-quarter profit fell 15% on
weakness in cereal sales in the U.S. and U.K. and impacts from a
recent recall. The cereal maker also cut its 2010 growth target,
sending shares down 3.4%.
The Nasdaq Composite (RIXF) gained 0.7% to 2281. The Standard
& Poor's 500-share index (SPX) rose 0.8% to 1115, led by its
materials and energy sectors.
In an encouraging sign for the jobs market, the Labor Department
said Thursday that initial claims for jobless benefits declined
11,000 to 457,000 in the week ended July 24. The decline beat
expectations of economists polled by Dow Jones Newswires, who had
predicted claims would fall by only 4,000. However, the previous
week's level of claims was revised upward, to 468,000 from
464,000.
Among stocks in focus, oil giant BP gained 2.1% amid reports
that the company is in negotiations with its Russian venture TNK-BP
Holding over the sale of about $1 billion of oil assets in
Venezuela, the Times of London newspaper reported. BP this week
tripled its target for asset disposals to $30 billion in an effort
to secure enough cash to cover the costs of the disastrous Gulf of
Mexico oil spill.
Among other companies reporting earnings, drug maker Astra
Zeneca rallied 1.3% after lifting its full-year financial targets
and doubled its 2010 share buyback program after reporting
second-quarter profits that beat forecasts.
Goodyear Tire & Rubber (GT) climbed 5.3% after swinging to a
better-than expected profit in the second quarter as volumes and
sales rose worldwide, particularly in its stronghold of North
America.
In the currency markets, the dollar came under selling pressure
amid comments from a ratings agency. If U.S. government projections
for debt levels materialize, the nation's triple-A credit rating
will have to be examined, Moody's Investors Service's lead
sovereign analyst for the country told Dow Jones Newswires on
Thursday.
The dollar index (DXY), which tracks the performance of the U.S.
currency against a basket of six others, fell 0.8%. Meanwhile the
euro broke above the $1.30 level, boosted by data showing that
economic sentiment in the 16-nation euro zone rose in July and the
number of unemployed in Germany declined. The euro was recently
trading at $1.3099, up from $1.2986 late Wednesday in New York.