Oct. 23 -- U.S. stocks rose for a second day after earnings reports from Apple Inc., American Express Co. and United Parcel Service Inc. eased concern the housing slump has curbed consumer spending.
Apple climbed the most since January after reporting record sales of Macintosh computers and growing demand for iPods and iPhones. American Express, the third-largest U.S. credit-card network, gained on results boosted by the spending of wealthy consumers. UPS, the world's biggest package shipping company, posted its steepest advance in a month after U.S. shipments increased for the first time this year.
The Standard & Poor's 500 Index added 7.62, or 0.5 percent, to 1,513.95 at 10:40 a.m. in New York. The Dow Jones Industrial Average gained 66.5, or 0.5 percent, to 13,633.47. The Nasdaq Composite Index increased 22.34, or 0.8 percent, to 2,776.27.
``If companies are still beating expectations, that's a good backdrop for stocks,'' said Robert Morgan, who helps manage about $10.5 billion at Janney Montgomery Scott LLC in Philadelphia. ``It says good things about the health of the U.S. economy.''
Stocks rallied around the world as better-than-expected earnings and forecasts diminished concern about slowing profit growth. In Europe, Schneider Electric SA, the world's biggest maker of circuit breakers, boosted its sales outlook. Mitsubishi UFJ Financial Group Inc. and National Australia Bank Ltd. paced gains by banks in Asia. The Morgan Stanley Capital International World Index of 23 developed countries climbed 1.2 percent, its biggest gain in a month.
Apple, American Express
Apple soared $12.37, or 7.1 percent, to $186.73. Fourth- quarter profit rose to $1.01 a share from 62 cents a year earlier, topping analysts' estimates. Apple also said earnings this quarter will climb to about $1.42 a share on sales of $9.2 billion, exceeding the $1.39 in profit and $8.57 billion in sales analysts had anticipated.
American Express gained $1.79 to $58.66. The company said profit climbed 10 percent as spending and borrowing by wealthy consumers increased. Third-quarter net income rose to 90 cents a share from 79 cents a year earlier, the company said. The average estimate from analysts surveyed by Bloomberg was 85 cents.
UPS climbed 96 cents, or 1.3 percent, to $76.05. Third- quarter profit rose 3.7 percent, helped by growing international shipments and a nearly 1 percent gain in U.S. shipments.
DuPont Gains
DuPont Co., maker of Corian countertops and Teflon for cookware, advanced after raising its 2007 forecast. The chemical maker said third-quarter profit climbed to 56 cents a share from 52 cents a year earlier as Latin American demand for corn and soybean seeds boosted sales outside the U.S. Full-year profit will be $3.15 to $3.20 a share, excluding some items, higher than the July forecast of $3.15, DuPont said. The shares rose 35 cents to $46.92.
More clues about the health of consumer spending will come on Oct. 25 when a government report is expected to show durable goods orders gained 1.5 percent in September after a drop of 4.9 percent in August, according to economists surveyed by Bloomberg. The Reuters/University of Michigan consumer sentiment index on Oct. 26 is forecast to show that confidence held steady in October.
The 145 members of the S&P 500 that reported third-quarter results through yesterday posted an average profit gain of 1.2 percent, topping the 0.6 percent drop forecast by analysts in a Bloomberg survey on Oct. 19. Still, earnings growth at that level would be the slowest since the beginning of 2002, according to Bloomberg data.
The S&P 500 has dropped 3.8 percent since the earnings season started with Alcoa Inc.'s report on Oct. 9 as results missed analysts' estimates at companies from Bank of America Corp. to Caterpillar Inc.
Fed Watch
Stocks also gained after Federal Reserve Bank of Chicago President Charles L. Evans said in a speech yesterday that policy makers must shield the economy from ``high cost'' events such a worsening housing slump. Traders anticipate the Fed will lower rates for a second time on Oct. 31, Fed funds futures contracts show.
AT&T Inc. advanced 19 cents to $41.36. The owner of the biggest U.S. mobile-phone service posted a 41 percent increase in third-quarter earnings on savings from acquisitions and revenue from new wireless handsets including the iPhone. The company met profit and sales estimates from analysts polled by Bloomberg.
Countrywide Financial Corp. climbed on plans to refinance or restructure as much as $16 billion of debt for buyers facing higher payments on adjustable-rate mortgages before the end of 2008, a move that may prevent some home owners from defaulting. The biggest U.S. home lender rose 32 cents to $16.
Microsoft, Lexmark
Microsoft Corp. added 30 cents to $30.81. The world's largest software maker, facing new competition from Apple, is working with sellers of its Windows Mobile phones to cut prices below $100. AT&T began offering the 3125 Windows Mobile model for $49.99. Another phone will go on sale for less than $100 next month, Microsoft said, declining to name the company selling the device.
Apollo Group Inc. jumped $4.81 to $70.74. The operator of the University of Phoenix formed a $1 billion joint venture with private-equity firm Carlyle Group to invest in education services worldwide.
Texas Instruments Inc. fell $2.77 to $31.50. The world's biggest maker of mobile-phone chips said sales this quarter will rise to as much as $3.68 billion, missing the average analyst estimate of $3.7 billion in a Bloomberg survey. UBS AG cut its recommendation on Texas Instruments to ``neutral'' from ``buy.''
Coach Inc. lost $3.39 to $38.08. The largest U.S. maker of luxury leather handbags forecast earnings per share of 68 cents for its current quarter, 2 cents below the average estimate of analysts. Chief Executive Officer Lew Frankfort said in a statement the company is ``concerned'' with the number of customers visiting U.S. stores.
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