US stocks ended a volatile session higher yesterday as investors looked ahead to an earnings season expected to show modest growth despite concerns over the economy’s health.
Wall Street fluctuated between positive and negative territory for much of the day before climbing in the final hour of trading, ending near its session highs. However, volume was light and the Dow’s gains were limited by a selloff of Johnson & Johnson shares.
Forecasts for first-quarter earnings have been scaled back in 2013, with profits seen rising just 1.6 per cent from the year-ago quarter, according to Thomson Reuters data. In January, earnings were seen rising 4.3 per cent.
The drop in expectations has come as economic figures suggest the recovery could be less robust than some had thought. Weak corporate results could give investors further reasons to sell, pushing both the Dow and the S&P 500 back from recent all-time closing highs.
The season unofficially started after the market closed with results from Alcoa. The aluminium company reported adjusted earnings that beat expectations, but revenue was down from the year-ago quarter.
After initially rising in extended-hours trading, Alcoa’s stock slid 1.1 per cent to $8.30. As the first Dow component to report, Alcoa is informally viewed as setting the initial tone for the season, though many more bellwether companies’ earnings won’t come out until next week. The S&P materials index ended yesterday’s session up 0.4 per cent.
The Dow Jones industrial average rose 48.23 points, or 0.33 per cent, to 14,613.48 at the close. The Standard & Poor’s 500 Index gained 9.79 points, or 0.63 per cent, to 1,563.07. The Nasdaq Composite Index advanced 18.39 points, or 0.57 per cent, to close at 3,222.25.
New York Report