Oct 28, 2014 1:25 PM
Stocks rise on climb in profits, confidence index
The Associated Press
NEW YORK (AP) U.S. stocks rose Tuesday after a key index tracking consumer confidence surged and several big companies reported earnings. Investors are also awaiting news from a two-day U.S. Federal Reserve meeting that ends Wednesday.
KEEPING SCORE: The Dow Jones industrial average rose 72 points, or 0.4 percent, to 16,890 as of 1:05 p.m. The Standard & Poor's 500 index climbed 11 points, or 0.5 percent, to 1,972. The Nasdaq composite rose 47 points, or 1 percent, to 4,533.
BIOTECH BOUNCE: Amgen, the world's biggest biotech drugmaker, rose 5 percent after it announced plans to cut more jobs, buy back $2 billion worth of stock and raise its dividend by 30 percent. That followed news Monday that Amgen's third-quarter adjusted earnings and revenue topped Wall Street's expectations. Amgen rose $7.50 to $155.70.
CONFIDENCE BOOST: An index of U.S. consumer confidence rebounded strongly in October, hitting a seven-year high as solid job gains raised expectations for economic growth. The rise was enough to offset a weak reading Tuesday in durable goods. Orders to U.S. companies for long-lasting manufactured goods fell for a second month in September, a government report showed. Orders have jumped around in recent months due to moves in the volatile category of aircraft orders.
THE QUOTE: "Confidence is good, and we're predicting Christmas is going to be very strong," said Phil Orlando, chief equity strategist at Federated Investments.
SLIM IS IN: The Madison Square Garden Co. surged 10 percent after it said it's considering a plan to split off its entertainment businesses from its media and sports divisions. The stock rose $6.71 to $72.49.
TWITTER TUMBLE: The social-media company plunged 9 percent after giving a disappointing outlook for the current quarter. Twitter reported third-quarter revenue late Monday that outpaced expectations, but investors are worried about revenue for the last three months of the year and growth in the number of users. They pushed the stock down $4.51 to $44.06.
HOME WATCH: U.S. home prices grew more slowly in August amid modest sales. The Standard & Poor's/Case-Shiller 20-city home price index rose 5.6 percent in August from 12 months earlier. Home prices were rising at a double-digit pace as recently as last fall.
ALL EYES ON FED: Investors are looking ahead to Wednesday's monthly policy announcement by the Fed's Federal Open Market Committee for a possible timeline for interest rate hikes. The Fed is winding down its $4 trillion bond-buying program, known as quantitative easing. That is heightening concern about whether the U.S. economy is strong enough to sustain growth without that support.
ENERGY: The price of U.S. crude oil rose 26 cents to $81.26 in New York. That helped push up energy stocks by 1.2 percent, the biggest gain among the 10 industry groups in the S&P 500. Crude has dropped since June when it hit a high of $107 a barrel.
BONDS AND DOLLAR: The price of the 10-year Treasury note fell slightly. The yield, which moves in the opposite direction to the price, rose to 2.28 percent from 2.26 percent late Monday. The dollar rose to 108.09 yen from Monday's 107.88 yen. The euro rose to $1.2739 from Monday's $1.2698.