locked
Stocks Rally on Microsoft, Countrywide RRS feed

  • Question

  •  

    NEW YORK (AP) — Stocks advanced sharply in early trading Friday, with Wall Street encouraged by strong earnings from Microsoft Corp. and an optimistic outlook from Countrywide Financial Corp.

    Investors appeared to be paying more attention to the profits reports than to the rise in crude oil to over $92 a barrel in Asian trading. After spiking overnight, December crude futures were up $1.32 at $91.78 on the New York Mercantile Exchange.

    The earnings reports gave investors hope that the problems in the housing market are contained and that U.S. consumers still have spending power. The positive mood was not dented by news that University of Michigan's final consumer sentiment reading for this month was 80.9, down from 83.4 in September.

    The Dow Jones industrial average rose 78.28, or 0.57 percent, to 13,750.20.

    Broader stock indicators also gained. The Standard & Poor's 500 index rose 12.89, or 0.85 percent, to 1,527.29, and the technology-dominated Nasdaq composite index soared 38.49, or 1.40 percent, to 2,789.35.

    Treasury bonds fell. The yield on the 10-year Treasury note, which moves inversely to the price, rose to 4.42 percent.

    Countrywide posted a wide loss of more than $1 billion in the third quarter, but the beleaguered mortgage lender, whose stock has plummeted due to rising subprime mortgage defaults, said it will be profitable in the fourth quarter and next year.

    Microsoft's reported late Thursday that its profit jumped 23 percent, thanks to brisk sales of the new Halo 3 video game, Windows and Office. Microsoft shares rose $3.53, or 11 percent, to $35.52.

    The financial sector continues to show signs of uneasiness following the summer's credit market problems. The New York Times reported that after Merrill Lynch & Co. posted its sharp third-quarter loss Wednesday, the investment bank's chairman and chief executive floated the idea of a merger with Wachovia Corp. Merrill shares rose $3.75 to $64.65 in morning trading.

    The credit squeeze, brought about by escalating subprime mortgage defaults, has given the banking industry trouble. Wall Street hopes the Federal Reserve will lower interest rates again when it meets next week, after cutting them in September.

    Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, with 139.6 million shares traded.

    The Russell 2000 Index of smaller companies rose 8.98, or 1.11 percent, to 815.09.

    On Friday, gold prices rose. The dollar advanced against the yen but fell against most other major currencies. The euro reached another record high versus the U.S. currency.

    Stock markets overseas advanced.

    Friday, October 26, 2007 4:18 PM

All replies