Stocks rebounded today as positive earnings and housing data helped to boost an uneasy market. IBM (IBM), Coca-Cola (KO) and Johnson & Johnson (JNJ) all announced quarterly earnings that beat analyst expectations. Shares of Wells Fargo (WFC) also jumped after the back said profits were up almost 30 percent. Financial stocks have been among the hardest hit during the summer decline in the market. Housing data also showed that new construction on homes reached a six-month high in June, lifting construction stocks. The positive earnings news is helping to divert investors away from the deteriorating debt ceiling talks. The House of Representatives is scheduled to vote on a spending bill that is widely expected to fail. House Speaker John Boehner has already said that attention is shifting to a Plan B. With the deadline to raise the nation’s debt ceiling only two weeks away, pressure has been mounting on Congress to come up with a plan to avoid defaulting on certain obligations. Investors have been moving away from stocks and into other assets like commodities and even Treasuries for safer alternatives. Gold prices, though flat on the day, is still above $1,600 an ounce. Oil spiked up over 2 percent, largely from the better-than-expected housing data.
Major U.S. Stock Indices
DJIA: 12,539.78 (+1.25 percent)
S&P 500: 1,320.06 (+1.09 percent)
NASDAQ: 2,810.24 (+1.63 percent)
Russell 2000: 825.92 (+1.22 percent)
In other news:
- The Gang of Six group says they’re nearing a plan to cut spending by $4 trillion and raise the nation’s borrowing cap. The questions is, can they gain any traction in Congress? [Associated Press]
- Is Goldman Sachs (GS) washed up? The firm missed estimates AND plans to cut an additional 1,000 jobs to reduce expenses. [Marketwatch]
- Rupert Murdoch goes in front of the U.K. Parliament to be questioned on the phone-hacking scandal. Oddly, shares of News Corp. (NWSA) are up. [The Street]
- A slight damper to the positive housing numbers: Robo-signing mortgages continues. [CNBC]
- This is probably why self-directed investors are increasing. Only 1 in 20 actively managed mutual fund investors do better than index funds. [Forbes]
Check back for more news.