tocks staged a late-day comeback yesterday as strong quarterly profits from consumer bellwethers like Starbucks outweighed worries about Greece’s shaky finances.
First quarter earnings are on track to set a record for the percentage of companies beating estimates. Eighty-five per cent of the 98 S&P 500 companies that have reported so far have beaten estimates, well above the 61 per cent in a typical quarter, according to Thomson Reuters.
Illustrating the revival of consumer spending, coffee chain Starbucks and SanDisk, which makes flash memory for mobile phones, digital cameras and other gadgets, both posted results that beat estimates.
Starbucks shot up 7.3 per cent to $27.25 and SanDisk surged 12.3 per cent to $42.22. Hershey profit nearly doubled and its shares rose 7.2 per cent to $48.08.
The S&P consumer discretionary index ended up 1.7 per cent, while the S&P retail index climbed 2.1 per cent.
“The earnings in this reporting period have been very strong, and the real positive is on the revenue side. You’ve really seen revenues begin to kick in and that shows private sector spending,” said Tim Ghriskey, chief investment officer of Solaris Asset Management, in Bedford Hills, New York.
“The consumer is waking up and satisfying some of this pent-up demand.”
The Dow Jones industrial average climbed 9.37 points, or 0.08 per cent, to 11,134.29. The Standard & Poor’s 500 Index rose 2.73 points, or 0.23 per cent, to 1,208.67. The Nasdaq Composite Index gained 14.46 points, or 0.58 per cent, to 2,519.07.
Data pointing to further stabilisation in the labor market added to the positive tone and helped reinforce optimism about the US economic recovery. Big manufacturers also fared strongly, with Boeing up two per cent at $75.59.
Besides SanDisk, iPhone maker Apple also contributed to the strength in technology shares, rising 2.8 per cent to finish at $266.36, another record close.
Microsoft, a Dow component, posted a stronger-than-expected 35 per cent jump in quarterly profit.