Results, manufacturing data buoys Wall Street

New York: US stocks rose on Friday, rebounding following two days of losses as solar companies jumped on results and strong data on manufacturing.

Equities have been pressured since Wednesday, when a Federal Reserve statement raised concerns about when the central bank would begin to scale back its stimulus program, which has contributed to the S&P 500’s advance of 23 percent this year. Some investors interpreted comments in the statement as suggesting the Fed would begin tapering stimulus earlier than expected.

The rally has taken the Dow and S&P repeatedly to record highs, leading some analysts to call for a pullback, especially in the wake of some signs of slowing growth, like weak economic data and an earnings season marked by tepid revenue.

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“I’m not comfortable with the market at all-time highs, especially with earnings being mediocre, but the manufacturing report was better than expected, and where else can you go with the Fed putting so much liquidity into the system?” said Mark Grant, managing director at Southwest Securities in Fort Lauderdale.

The US manufacturing sector expanded at its fastest pace in 2-1/2 years last month, a rate that was stronger than expected, according to the Institute for Supply Management’s survey, which followed the similarly strong Chicago Purchasing Manager’s Index on Thursday.

Chevron Corp was the latest company to disappoint on results as its third-quarter revenue came in below expectations. That sent shares of the Dow component down 2 percent to $117.55.

The Dow Jones industrial average was up 81.91 points, or 0.53 percent, at 15,627.66. The Standard & Poor’s 500 Index was up 6.79 points, or 0.39 percent, at 1,763.33. The Nasdaq Composite Index was up 11.75 points, or 0.30 percent, at 3,931.46.

For the week thus far, the Dow is up 0.4 percent, the S&P is up 0.3 percent and the Nasdaq is down 0.2 percent. Both the Dow and S&P are on track for their fourth straight week of gains.

American International Group Inc fell 6.3 percent to $48.41 as the S&P’s biggest decliner a day after reporting third-quarter earnings that slightly beat expectations, though analysts had expected better results in the insurer’s consumer lines business.

First Solar Inc soared 13 percent to $56.76 after its results beat expectations and the company raised its full-year profit outlook. Among its peers, Yingli Green Energy climbed 5.3 percent to $6.32 and Canadian Solar was up 7.2 percent to $24.62.

With about 71 percent of S&P 500 companies having reported, 68.2 percent have topped Wall Street’s expectations, above the long-term average of 63 percent, according to Thomson Reuters data. However, only 53.6 percent have topped revenue forecasts, below the 61 percent average since 2002.

In company news, Ford Motor Co shares rose 0.6 percent to $17.21 after the company reported October sales growth of 14 percent.

Container Store Group Inc shares jumped 93 percent to $34.63 in their trading debut after the company priced its initial public offering at the top end of an increased price range.

Reuters