Earnings relief helps send US stocks higher

US stocks rose yesterday, giving the S&P 500 its best two-day advance in a month as strong earnings from Johnson & Johnson, Goldman Sachs and other bellwether companies raised hopes for the rest of the reporting season.

Johnson & Johnson increased its full-year profit outlook. Its stock rose 1.4 per cent to $69.55, helping the Dow Jones industrial average register its best day since 13 September, when the Federal Reserve unveiled its third round of stimulus, better known as QE3.

Goldman Sachs earnings also beat expectations, its revenue more than doubled, and it raised its quarterly dividend. But it earned less money from customers’ trading, and the stock lost one per cent to $123.22.

Goldman’s results followed upbeat earnings from Citigroup in the previous session. Shares of Citigroup jumped 1.6 per cent to $37.25 yesterday after the surprising resignation of chief executive Vikram Pandit. An S&P financial-sector index rose 0.7 per cent.

The earnings reports were among a flood of results from 80 S&P 500 companies as the third-quarter earnings season picks up the pace. A spate of corporate warnings heading into the period raised worries that slower growth in Europe and China may be affecting corporate America more than previously thought.

The Dow Jones industrial average jumped 127.55 points, or 0.95 per cent, to 13,551.78 at the close. The Standard & Poor’s 500 Index advanced 14.79 points, or 1.03 per cent, to finish at 1,454.92. The Nasdaq Composite Index rose 36.99 points, or 1.21 per cent, to close at 3,101.17.