A Day After a Rout, Us Stocks Turn Higher on Solid Earnings

Associated Press |

NEW YORK (AP) — Strong results from major companies including Microsoft  (MSFT), Visa  (V) and Comcast  (CMCSA) are sending U.S. stocks higher Thursday morning as the market found its footing after three weeks of steep declines.

The S&P 500 index rose 1 percent. It plunged 9 percent since early this month as investors worried about climbing interest rates and the effects of the U.S-China trade dispute.

Encouraging economic data helped stabilize markets. The Commerce Department said orders to U.S. factories for major manufactured goods grew in September, and the increase was larger than analysts expected.

European Central Bank President Mario Draghi said the eurozone economy is still growing at a solid clip even though there are signs it has weakened somewhat recently. Asian markets took big losses, as the U.S. market did the day before.

The S&P 500 added 30 points to 2,686 as of The Dow Jones Industrial Average rose 221 points, or 0.9 percent, to 24,800.

The S&P 500 index had fallen for 13 out of the last 15 days, with a couple of huge losses last week and another on Wednesday. Those erased the benchmark indexes' gains from earlier in the year. Technology companies have fared worse than others during the recent skid, and the Nasdaq composite is coming off its biggest one-day loss in seven years.

The Nasdaq surged 102 points, or 1.4 percent, to 7,211. As of Wednesday's close it had dropped 12.3 percent from its record high in late August.

Microsoft surpassed analyst forecasts in the first quarter as it mined new revenue sources in online subscriptions, gaming and its LinkedIn professional networking service. Its stock jumped 6 percent to $108.61.

Microsoft and several other huge U.S. companies like Amazon and Alphabet have dropped more than 10 percent from their recent highs, a mark Wall Street calls a "correction."

Cable TV and entertainment company Comcast said it gained high-speed internet customers to cancel out a decline in video customers. The company is taking over European pay-TV operator Sky as more cable and telecom companies buy up the companies that make and distribute TV shows and movies to compete in a changing media landscape.

Comcast rose 4.1 percent to $35.53. A day earlier, media and communications companies plunged after AT&T said it lost subscribers in its latest quarter.

Visa added 1.1 percent to $135.78 after it said payment volumes climbed in the fourth quarter.

Smaller and more U.S.-focused companies have also been sinking as Wall Street worries about future growth in the U.S. economy, which is tightly connected to their profits, as well as the possibility that rising interest rates will make it tougher for them to pay back their debts.

The Russell 2000 index gained 20 points, or 1.4 percent, to 1,488. It's fallen more than 15 percent since the end of August and is down 3.1 percent so far this year.

The stocks that have led the market higher recently, including utility and consumer products companies, suffered losses Thursday morning.

Markets have grown volatile since after three months of abnormally calm trading. That's caused huge losses and a few days of big gains as well.

The French CAC 40 jumped 1 percent and Germany's DAX added 0.1 percent. The British FTSE 100 slipped 0.2 percent after weak results from advertising company WPP.

Japan's Nikkei 225 index swooned 3.7 percent and Hong Kong's Hang Seng index ended 1 percent lower. The Kospi in South Korea dropped 1.6 percent. The heaviest losses came from technology companies. Semiconductor maker Tokyo Electron lost 4.3 percent and Taiwan Semiconductor Manufacturing shed 4.4 percent. South Korea's Samsung Electronics sank 3.6 percent and Japanese telecoms and energy giant Softbank lost 4.4 percent.

Toyota gave up 2.7 percent while airline Cathay Pacific's shares dropped as much as 6.5 percent but ended 3.8 percent lower after it said it had discovered a data breach affecting 9.4 million passengers.

U.S. bond prices were little changed. The yield on the 10-year Treasury note remained at 3.12 percent.

Benchmark U.S. crude edged up to 0.1 percent to $66.89 a barrel in New York. Brent crude, the benchmark for international oil prices, rose 0.2 percent to $76.36 a barrel in London.

The dollar slipped to 112.35 yen from 112.44 yen. The euro fell to $1.1375 from $1.1387.

Elaine Kurtenbach in Bangkok and Katie Tam in Hong Kong contributed to this report.

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Companies

Symbol Name Price Change % Volume
V Visa Inc. 140.18 -1.66 -1.17 8,628,027 Trade
MSFT Microsoft Corporation 108.29 1.01 0.94 33,502,121 Trade
CMCSA Comcast Corporation Class A Common Stock 38.59 0.10 0.26 21,542,352 Trade

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