April 24 (Bloomberg) -- U.S. stocks rose, paring losses in the market’s first weekly drop in almost two months, after companies from Ford Motor Co. to American Express Co. and Microsoft Corp. reported better-than-estimated results.
Ford rallied 19 percent after slowing its consumption of cash. American Express climbed 11 percent as the credit-card company said it plans to repay the government’s investment. Microsoft added 4.1 percent following its smaller-than-forecast profit decline and prediction of bigger cost savings. Schlumberger Ltd., the largest oilfield-services provider, jumped 4.5 percent after profit fell less than estimated.
“We’ve driven down expectations so low that earnings across the board have been ahead of estimates,” said James Dunigan, managing executive of investments at PNC Wealth Management in Philadelphia, which oversees $96 billion. “That’s providing some catalyst for people to put together a story of where the economy is going to be in couple of months. We have seen the worst.”
The Standard & Poor’s 500 Index added 1.3 percent to 862.6 at 10:08 a.m. in New York, extending gains after a report on new-home sales topped estimates. The Dow Jones Industrial Average rose 96.13 points, 1.2 percent, to 8,053.19. The Russell 2000 Index increased 1.5 percent.
The S&P 500 is down 1.3 percent this week on renewed concern that banks may post more credit losses and as share valuations jumped after six weeks of gains. The U.S. benchmark index has rebounded 27 percent from a 12-year low on March 9 on speculation government efforts to fix the banking system and revive the economy will pull the nation out of a recession.
Ford, American Express
Ford Motor jumped 84 cents to $5.33. Ford, the only U.S. automaker not on government aid, posted a first-quarter adjusted loss of 75 cents a share, 40 percent narrower than the $1.24 average of analyst estimates compiled by Bloomberg. Ford’s cash use was $3.7 billion, a drop from $7.2 billion in the fourth quarter.
American Express climbed $2.25 to $23.22. The biggest U.S. credit-card company by purchases reported first-quarter profit from continuing operations of 32 cents a share, more than double the average analyst estimate.
Microsoft, the world’s largest software maker, added 78 cents to $19.70 after yesterday reporting a smaller drop in third-quarter profit than some investors anticipated and predicting bigger cost savings this year. Morgan Stanley raised its recommendation for Microsoft to “overweight” from “equal weight,” citing an “accelerating growth story.”
‘Seen the Worst’
“A lot of the big negative surprises are behind us,” said David Rudow, an analyst with Thrivent Asset Management in Minneapolis. The company oversees about $65 billion, including Microsoft shares. “We’ve seen the worst. It’s just a question of when we see return to growth and normal spending again.”
Amazon.com Inc. advanced 1.8 percent to $82.05. The biggest Internet retailer reported first-quarter sales and profit that beat analysts’ estimates, bolstered by free shipping offers and demand for the Kindle electronic-book reader.
Juniper Networks Inc. climbed 10 percent to $21.22. The second-largest maker of networking equipment forecast second- quarter profit in line with analysts’ estimates and said a measure of profitability will increase from last quarter.
Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression.
Of the S&P 500 companies that reported earnings from the close of trading yesterday through today’s open, 34 beat the average analyst estimate and 16 missed, according to Bloomberg data.
Commodity Gains
Energy and raw-materials producers surged as crude oil rose for a fourth day, copper and metals prices gained and Schlumberger said first-quarter profit fell less than estimated as producers pulled back spending after crude prices tumbled.
Schlumberger surged 7.2 percent to $49.95. Exxon Mobil Corp., the world’s largest oil company, gained 0.7 percent to $66.18. ConocoPhillips added 2.7 percent to $40.99. Chevron Corp. rose 2.5 percent to $67.15.
Crude oil for June delivery increased as much as 4 percent to $51.60 on the New York Mercantile Exchange. Futures are up 14 percent this year and heading for a 1.7 percent weekly gain, the first increase in three weeks.
Stress Tests
Financial shares in the S&P 500 underperformed the rest of the market today, gaining 0.7 percent as a group.
U.S. banks that get preliminary results of government stress tests today may struggle to raise money after bad assets at the biggest lenders almost tripled on average in the past year. The results will be disseminated to representatives of the firms by Federal Reserve officials in a number of meetings at central bank offices today, according to a person familiar with the matter. The Fed is set to release the methodology for the exams to the public today.
Orders for U.S.-made durable goods fell in March less than forecast, adding to signs the economic slump is easing. The 0.8 percent decrease reported by the Commerce Department compares with an anticipated 1.5 percent drop, according to the median in a Bloomberg News survey of economists. The news was tempered by revisions to February figures that showed a much smaller gain than the government previously projected.
U.S. stocks advanced yesterday as better-than-estimated earnings at companies from Marriott International Inc. to ConocoPhillips and EBay Inc. overshadowed a drop in existing home sales and higher jobless claims.
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