Gains by big players boost stocks

Solid quarterly results from a range of big companies helped send the stock market slightly higher today.

Gains by big players boost stocks

Solid quarterly results from a range of big companies helped send the stock market slightly higher today.

The stand-out was Visa, whose 10% jump helped tug the Dow Jones industrial average up nearly 200 points.

Visa, the world’s largest payment-processing company, turned in quarterly earnings late yesterday that topped Wall Street’s forecasts and announced plans to spend as much as 5 billion dollars on buying its own shares. Visa’s stock gained 21.99 dollars to 236.65 dollars.

For investors, there was plenty of encouraging news. Before the market opened, the government said the US economy grew at an annual rate of 3.5% in the three months ending in September, powered by more business investment, sales abroad and the biggest jump in military spending in five years.

“It’s another report that indicates the economy can stand on its own two feet,” said Peter Cardillo, chief market economist at Rockwell Global Capital Management, referring to the government’s estimate of economic growth.

The Standard & Poor’s 500 index gained 12.35 points, or 0.6%, to close at 1,994.65. The Nasdaq composite rose 16.91 points, or 0.4%, to 4,566.14.

The Dow Jones industrial average surged 221.11 points, or 1.3%, to 17,195.42. Unlike other market measures, the Dow weighs its roster of 30 large corporations by their stock prices rather than by their market size. That means companies with the most expensive stocks, such as Visa and Goldman Sachs, have more power to drive the average up or down.

The world’s second-largest card-payment company, MasterCard, said its third-quarter profit surged as Americans appeared less hesitant to use their debit and credit cards. The results beat Wall Street’s expectations, propelling MasterCard’s stock up 7.14 dollars, or 9%, to 83.13 dollars.

Sam Stovall, chief equity strategist at S&P Capital IQ, saw a number of optimistic signs for the market.

Reports that Visa and MasterCard are handling more transactions could mean that Americans will be more likely to open their wallets during the holiday shopping season. What is more, the market is approaching a stretch that nearly always rewards investors.

“We’re entering the best six months of the year, November through April,” Mr Stovall said. Since the Second World War, the market has climbed 94% of the time, for an average gain of 15%.

Rising corporate earnings have helped turn the market higher in recent weeks. More than half of the S&P 500’s members have released their third-quarter results, and roughly seven out of 10 have beaten Wall Street’s targets, according to S&P Capital IQ.

Third-quarter earnings are now on track to increase nearly 7%, with health-care companies reporting the largest profit gains.

BorgWarner, a maker of car parts, said a slide in the value of foreign currencies against the dollar will hamper its results this year. The company, which operates in 19 countries, cut its forecast for full-year profits and sales. BorgWarner slumped 2.49 dollars, or 4%, to 54.37 dollars.

In Europe, France’s CAC 40 gained 0.7% and Germany’s DAX edged up 0.4%. Britain’s FTSE 100 rose 0.1%.

more courts articles

Stephen Bear ordered to pay back profits from sharing private sex tape Stephen Bear ordered to pay back profits from sharing private sex tape
Gary Glitter victim seeking six-figure sum in damages, court told Gary Glitter victim seeking six-figure sum in damages, court told
Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited