u.s. stock-index futures rise, page-2

u.s. stocks rise on earnings U.S. Stocks Rise on Earnings; Dow Average Reaches 6-Year High
April 26 (Bloomberg) --

The Dow Jones Industrial Average climbed to a six-year high, leading gains in U.S. stocks, as earnings at Anheuser-Busch Cos. and Colgate-Palmolive Co. beat analysts' forecasts and sales of new homes surged.

Hovnanian Enterprises Inc. and Pulte Homes Inc. set the pace as homebuilders rallied on a government report showing the biggest monthly jump in sales since 1993.

``Earnings have been quite positive, and I think that's the number one reason to buy stocks and the number one reason why this market has held together,'' said Alfred Goldman, chief market strategist at A.G. Edwards in St. Louis.

Energy stocks declined as oil prices fell for a third day. Rising interest rates also hampered the advance, as the housing data and a jump in durable-goods orders sent the yield on 10- year Treasury notes to its highest since June 2002.

The Dow average rose 71.24, or 0.6 percent, to 11,354.49, its highest since Jan. 19, 2000. The Dow, which first reached a six-year high last week, got an added lift from General Motors Corp. after Merrill Lynch & Co. said the carmaker has enough cash to pay workers who accept buyout offers.

The Standard & Poor's 500 Index added 3.67, or 0.3 percent, to 1305.41, while the Nasdaq Composite Index gained 3.33, or 0.1 percent, to 2333.63. It was the first time all three indexes rose this week.

The market's advance on higher earnings had stalled as increases in consumer confidence and sales of previously owned homes reignited concern that the Federal Reserve would keep lifting interest rates.

Earnings Scorecard

About 72 percent of S&P 500 companies that have reported first-quarter profit have beaten analyst estimates, more than the 57 percent average since 1992, data from Thomson Financial show. More companies will release earnings this week than any other week during the so-called reporting season.

Anheuser-Busch climbed $2.27 to $44.90. The world's largest brewer reported better-than-expected first-quarter profit on the biggest sales gain in more than a year. Net income was 64 cents a share. JPMorgan analyst John Faucher, who is top-ranked by StarMine, estimated 54 cents a share, including a 2-cent cost for stock-option expenses.

Colgate-Palmolive, the world's largest toothpaste maker, rallied $1.60 to $58.95. The company said first-quarter profit, excluding some items, increased to 70 cents a share as new brands lifted sales in Latin America. The average estimate of analysts surveyed by Thomson was 66 cents.

Sales of new homes in the U.S. jumped the most since April 1993, up 13.8 percent to an annual rate of 1.213 million, the Commerce Department said. Economists expected sales at a 1.11 million rate, according to a Bloomberg News survey.

Builders Soar

The Bloomberg U.S. Homebuilders Index rose 1.6 percent. Pulte, the country's second-largest builder, gained $1.14 to $39.04. Hovnanian, New Jersey's largest homebuilder, added 92 cents to $40.63. D.R. Horton Inc., No. 1 U.S. homebuilder, added 51 cents to $31.33.

The durable goods report showed orders jumped 6.1 percent last month as businesses invested in new equipment to meet demand. The increase in bookings for expensive items made to last at least several years was the most since May 2005 and up from a gain of 3.4 percent in February, the Commerce Department said. Excluding transportation equipment, orders rose 2.8 percent. Economists expected gains of 1.8 percent and 1 percent, respectively in a Bloomberg survey.

Beige Book

A regional survey of the economy by the Fed added to concern over accelerating inflation. Labor markets across the U.S. are ``tightening'' as most of the country expands, said the Fed's dozen regional banks in the so-called beige book report.

The yield on the benchmark 10-year Treasury note climbed 3 basis points, or 0.03 percentage point, to 5.10 percent in New York, according to bond broker Cantor Fitzgerald LP. Higher yields may make fixed-income investments a more attractive alternative to equities and raise borrowing costs for companies.

``Solid earnings reports are helping to put in a bit of a floor in the market,'' said Jeff Kleintop, who helps manage $50 billion as chief investment strategist at PNC Advisors in Philadelphia. ``But the sensitivity here to the economic data given the question about the outlook for Fed tightening, that seems to be the overriding influence.''

GM, Oil Stocks

GM, the world's largest automaker, advanced $1.74, or 8.1 percent, to $23.15 for the top gain in the Dow average and highest price since Feb. 6. Merrill raised its rating to ``neutral'' from ``sell,' saying GM has enough money in its pension and retiree health-care funds to pay workers who accept its buyout offers. GM may get 50 percent of 63,000 union workers eligible for full or early retirement to leave, analyst John Murphy wrote in a report.

About four stocks rose for every three that fell on the New York Stock Exchange. Some 1.77 billion shares changed hands on the Big Board, 8.4 percent more than the three-month average.

Oil for June delivery slid 1.3 percent to $71.90 a barrel in New York, bringing the loss this week to 4.3 percent. The Energy Department said U.S. refineries increased output of gasoline and other fuels.

Energy shares weighed on the market for a third day after reversing earlier gains. An S&P 500 measure slid 1.4 percent. Valero Energy Corp., the No. 1 U.S. refiner, slumped $3.20 to $63.10. Exxon Mobil Corp., the world's largest publicly traded oil company, lost 85 cents to $63.10.

Baker Hughes Inc. was the exception among energy stocks. The No. 3 oilfield-services provider said first-quarter profit soared 89 percent to $339.2 million as customers spent more searching for oil and gas. The company also raised its 2006 profit and sales growth forecast. Baker Hughes advanced $3.07 to $79.

PepsiCo, AT&T Earnings

PepsiCo Inc., the world's No. 2 soft-drink maker, added 36 cents to $57.86. The company said first-quarter profit rose 12 percent to $1.02 billion, or 60 cents a share, on demand for Frito-Lay snacks and Gatorade sports drinks. UBS Securities LLC analyst Caroline Levy, who is top-ranked by StarMine Corp., estimated earnings of 59 cents a share.

AT&T Inc., the largest U.S. telephone company, rose for a second day after reporting profit that exceeded analysts' estimates. The stock gained 56 cents to $26.16 today.

Sprint Nextel Corp., the third-largest U.S. wireless services company, dropped 68 cents to $24.35. Sprint said first- quarter profit, excluding some costs, was 35 cents a share, missing the 37 cents expected by analysts in a Thomson survey. The company added fewer customers than analysts estimated.

Bank of America Corp., the second-biggest U.S. bank, rose 62 cents to $47.71. The company said it will repurchase up to $12 billion of its shares within the next 18 months to help boost a stock price that has lagged peers.

Buffett's Day

The earnings news was mixed for Warren Buffett's Berkshire Hathaway Inc., which was the biggest shareholder in both Moody's Corp. and Anheuser-Busch as of December.

Moody's slid $7.65 to $62.78. The company, whose founder created credit ratings, said first-quarter revenue rose 13 percent to $407.9 million, the slowest pace since December 2004.

Berkshire Hathaway shares still jumped the most in seven months, adding $1750, or 2 percent, to $88,700.