- POSTED: 10 Jul 2014 05:21
US stocks scored moderate gains following a solid kickoff to earnings season from Alcoa and Federal Reserve meeting minutes signaling an end to its bond-buying program in October.
NEW YORK: US stocks on Wednesday scored moderate gains following a solid kickoff to earnings season from Alcoa and Federal Reserve meeting minutes signaling an end to its bond-buying program in October.
The Dow Jones Industrial Average gained 78.99 points (0.47 per cent) to 16,985.61.
The broad-based S&P 500 rose 9.12 (0.46 per cent) to 1,972.83, while the tech-rich Nasdaq Composite Index advanced 27.57 (0.63 per cent) to 4,419.03.
Wednesday's gains snapped a two-day slide.
Alcoa unofficially kicked off second-quarter earnings season after markets closed Tuesday with profits of $138 million, up from a loss of $119 million a year ago. The company benefited from lower costs and said aluminum demand was on track to increase seven per cent in 2014.
Alcoa shares shot up 5.7 per cent to $15.69.
The Fed minutes of the June meeting of the policy-setting Federal Open Market Committee showed the central bank plans to end its bond-buying stimulus program in October.
But the Fed also expects it would not begin raising its near-zero benchmark interest rate for "a considerable time" after the asset-purchase program ends, "especially if projected inflation continued to run below the Committee's 2 per cent longer-run goal," the minutes said.
"They still are not in any rush to change monetary policy," said Peter Cardillo, chief market economist at Rockwell Global Capital.
American Airlines jumped 4.3 per cent as it said it expects second-quarter pre-tax profit margins of 12-13 per cent, up from the range of 10-12 per cent estimated in May.
The Container Store sank 8.4 per cent after the company reported a loss of $3.6 million in its fiscal first quarter on a 0.8 per cent drop in comparable store sales.
"Consistent with so many of our fellow retailers, we are experiencing a retail 'funk,'" said Kip Tindell, chief executive of the Container Store.
Salix Pharmaceuticals announced it reached a deal to combine with an Irish-based subsidiary of Cosmo Pharmaceuticals of Italy. The companies said the transaction will enhance Salix's holdings in treating gastrointestinal disease and result in lower taxes. Salix shares fell 2.9 per cent.
Bond prices rose. The yield on the 10-year US Treasury dipped to 2.55 per cent from 2.57 per cent Tuesday, while the 30-year dropped to 3.36 per cent from 3.38 per cent. Bond prices and yields move inversely.