Wall Street gains as earnings flow in
NEW YORK — Stocks rose on Wall Street Wednesday after U.S. corporate earnings reports got off to a good start.
The Dow Jones industrial average climbed 61.66 points to 13,390.51, its first gain of the week. The Standard & Poor’s 500 index gained 3.87 points to 1,461.02, and the Nasdaq composite rose 14 to 3,105.81.
Having rallied after a last-minute resolution stopped the U.S. from going over the “fiscal cliff,” stocks are facing their first big challenge of the year as companies start to report earnings for the fourth quarter of 2012. Throughout last year, analysts cut their outlook for earnings growth in the period and now expect them to rise by 3.21 percent, according to data from S&P Capital IQ.
“Maybe earnings expectations were a little too low,” said Ryan Detrick, a strategist at Schaeffer’s Investment Research. “You don’t need to have great earnings, you just need to beat those expectations” for stocks to rally, Detrick said.
Early indications were decent. Aluminum maker Alcoa reported late Tuesday that it swung to a profit for the fourth quarter, with earnings that met Wall Street’s expectations. The company brought in more revenue than analysts had expected, and the company also predicted rising demand for aluminum this year as the aerospace industry gains strength. Alcoa is usually the first Dow component to report earnings every quarter.
Despite the better revenue number, Alcoa’s stock performance Wednesday was lackluster. It traded higher for part of the day then ended down 2 cents at $9.08.
Other companies fared better after reporting earnings. Helen of Troy, which sells personal care products under brands including Dr. Scholl’s and Vidal Sassoon, rose 2.7 percent, up 90 cents to $34.43 after reporting a 15 percent increase in quarterly net income.