US stocks rose on Wednesday for the first time this week as a range of companies posted solid results. Shares of technology companies continued to advance and better-than-forecast profit for Boeing gave investors some joy.
The Dow gained 42.99, or 0.34 per cent to 12763.22, while the broader S&P 500 added 3.99, or 0.29 per cent to 1379.93. The Nasdaq rose 28.27, or 1.19 per cent to 2405.21.
The Dow and S&P briefly turned lower around midday as shares of Ambac Financial Group slid on worries about the bond insurer's outlook and investors fretted anew about the impact of the subprime mortgage fallout.
Early in the day, Ambac posted a wider-than-expected first-quarter loss, sending its shares 42.6 per cent into the red, its worst slide in more than three months.
Shares of rival MBIA dropped 33.8 per cent.
However, news that Liberty Mutual Group had agreed to buy insurer Safeco for about US$6.2billion in cash, helping to limit the downside in the financial sector. Safeco shares jumped 45.8 per cent.
In earnings related news, Boeing advanced 4.6 per cent after it said profit rose 38 per cent to US$1.2 billion in the first quarter. The aircraft maker said its backlog of orders grew to a record US$346 billion, while revenue rose 4 per cent to US$16 billion.
Broadcom Corp, which makes chips for Nintendo’s Wii video-game console, leapt 16.3 per cent on beating its quarterly revenue target. The results fuelled a 4.1 per cent jump in an index of semiconductor stocks and set a positive tone for the entire sector.
Electrical parts maker Molex surged 15.2 per cent, while software company Vmware gained 4.9 per cent.
Meanwhile, Yahoo! reported stronger-than-expected first-quarter earnings after the closing bell Tuesday.
Despite the upbeat earnings, Yahoo! shares fell nearly 2 per cent as investors await the company's response to Microsoft's unsolicited buyout offer. Yahoo! has until Saturday to accept Microsoft's bid or face a proxy fight. Microsoft was up 4 per cent.
After the bell and before Thursday's opening bell, 213 companies were set to report their earnings including high profile companies Amazon and Apple.
Apple rose 1.7 per cent, benefitting from optimism that its quarterly profits would exceed Wall Street's expectations on posting after the bell.
The iPod maker reported a 36 per cent jump in second-quarter profit after winning customers for its Macintosh personal computers. However, in after hours trade the stock fell almost 1 per cent after the earnings forecast fell short of some projections.
Also after the close, Amazon beat first-quarter earnings forecasts but said full-year operating income may be less than predicted. Its shares gained 1.8 per cent leading up to the announcement, but fell 6.9 per cent in after hours trading.
Telecom company Qualcomm gained 0.8 per cent before posting its quarterly results. Even though it raised its guidance for the current quarter, shares were trading down 2.2 per cent in after-hours trading.
Cigarette maker Philip Morris International gained 3.9 per cent after it raised its full-year earnings forecast, citing currency benefits.
NYMEX light crude oil for June delivery rose US23c to settle at US$118.30 a barrel, hovering around record levels.
Record high fuel prices have battered the airline industry, resulting in steep quarterly losses for some carriers.
Delta Airlines said soaring fuel prices eroded its market value and led to a US$6.4 billion loss in the first quarter. Its stocks fell 3.5 per cent.
At the same time, Northwest Airlines reported a US$4.14 billion first-quarter loss, mostly because of a US$3.9 billion charge related to rising fuel prices and the company's declining share price. Northwest was down almost 5 per cent.
Last week, Northwest agreed to join with Delta to create the world's largest carrier.
In materials, Freeport-McMoRan Copper & Gold, the second-largest copper producer in the US, said first-quarter profit more than doubled but still dropped 2.2 per cent as gold prices fell back.
Peers Newmont Mining and Barrick Gold also lost, closing 1.8 per cent and 4.5 per cent lower respectively.
COMEX gold for June delivery fell US$16.20 to US$909.
UK markets
UK shares managed to tack on 0.8 per cent even as fears of further rights issues weighed on the financial sector. The British bourse was buoyed by resource plays that continued to benefit as crude hovered around record prices.
The benchmark FTSE 100 gained 48.90, of 0.81 per cent to 6083.60.
Oil stocks were among the top gainers. BP gained 1.3 per cent, Tullow Oil gained 4 per cent, Cairn Energy added 3.1 per cent and Royal Dutch Shell picked up 2.9 per cent.
There was talk that was cutting over one hundred jobs in Aberdeen, as it sells oil fields in the declining North Sea.
The miners were also buoyant. Xstrata added 2.6 per cent, Antofagasta gained 2.5 per cent and ENRC jumped 8.3 per cent.
Lonmin tacked on a relatively modest 0.5 per cent after the platinum producer posted an 8.3 per cent percent rise in second-quarter platinum sales.
Looking to the Aussie majors, BHP Billiton gained 2.4 per cent and its rival and takeover target Rio Tinto added 1.2 per cent.
In a statement to the press, BHP Billiton chief executive unleashed a scathing attack on its reluctant takeover target.
He said Rio was consistently beaten out by BHP, pointing to number metrics such as volume growth, earnings per share growth and share price performance.
"It must be terrible [for Rio] that every quarter, BHP outperforms, and that has been the case for seven years," he said.
Looking to the embattled financial sector, Royal Bank of Scotland sustained a 3.6 per cent decline a day after it announced a 12 billion pound rights issue. RBS said the funds raised would be used to cover write downs on the value of toxic assets relative pressure on its balance sheet.
The sectors other majors also backtracked as investors braced themselves for the next rights issue announcement. HBOS gave up 3.9 per cent, Barclays shed 1.1 per cent and Lloyds TSB was 2.1 per cent lower.
Meanwhile, Alliance & Leicester slipped 7.5 per cent after going ex-dividend.
Elsewhere, GlaxoSmithKline was up 1.6 per cent after it said profits fell by a less than expected 5 per cent in the first quarter. Meanwhile, AstraZeneca shares climbed 2.7 per cent ahead of first-quarter results, which are slated for Thursday.
European markets
European investors were able to look past continuing uncertainty in the financial sector close in positive territory. Markets were lifted by earnings optimism and M&A talk in the technology plays.
France’s CAC 40 added, 72.01, or 1.48 per cent while Germany’s benchmark DAX gained 66.73, or 0.99 per cent to 6795.03.
Techs rallied in anticipation of Apple’s earnings announcement, which was due after close of trade on Wall Street. Siemens was a positive influence on continental indices, rising 3.7 per cent.
Meanwhile shares in Infineon rose by nearly 9 per cent after the Financial Times Deutschland reported the company was in talks with US based Micron, Korea’s Hynix and Japan’s Elpida to sell its 77 per cent stake in Qimonda.
Qimonda, a supplier of semiconductor memory products, saw its shares jump 8.3 per cent in Frankfurt.
Traders also said Infineon itself could be the target of a private equity takeover attempt.
Among the financials, Societe Generale fell 0.6 per cent, BNP Paribas gained 0.2 per cent, AXA dropped 1.4 per cent and Deutsche Bank shed 1.4 per cent.
Japanese markets
Japan's benchmark Nikkei edged up 0.2 per cent on Wednesday, with oil plays such as Nippon Oil Corp and anyone else that deals in the increasingly pricey fuel all benefiting as the commodity surged towards US$120 a barrel. However trading appeared thin as investors remained largely on the fence ahead of earnings reports later in the week.
Nippon Oil finished 7.39 per cent north of the gain line.
Agricultural stocks, including the likes of Nissan Chemical Industries who provides chemicals to farmers, were also boosted by rising global food prices along the same lines Kubota Corp, a major maker of farm equipment, picked up around 3.5 per cent, while Nissan Chemical climbed 3.9 per cent.
Meanwhile, drug firms were also among the front-runners, with Chugai Pharmaceutical up almost 9 per cent after it lifted this year's profit outlook. Chugai Pharmaceutical said government drug price cuts were not as bad as feared, though first-quarter income halved on weak Tamiflu sales.
Hong Kong markets
Hong Kong stocks surged 1.4 per cent to a three-month closing high yesterday as a strong rebound in Shanghai fuelled institutional buying of blue chip stocks such as PetroChina. Markets were once again buoyed by rumours the government may be in the process of putting together some measures to prop up the market.
Hong Kong's benchmark Hang Seng Index bucked the trend set in the United States and gained 350.09 points to close at 25,289.24.
Among the most traded stocks for the day was China Life, gaining almost 3 per cent.
PetroChina rose 4.8 per cent and Sinopec gained 3.8 per cent in their third consecutive day of gains after Beijing moved to provide subsidies to compensate for refining losses.
Meanwhile, Macau hotel and casino operator Galaxy jumped 13 per cent after the Macau government said on Tuesday it would halt the issuance of new casino licences and freeze land allocations for new casinos to rein in the booming gaming industry.
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