23/07/2012 - 06:52

Earnings help US stocks eke out gains

23/07/2012 - 06:52


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US stock markets managed to paddle aside a stream of negative news last week, riding a tidal wave of earnings to modest gains.

The Dow Jones Industrial Average finished the week up 0.4 per cent to 12,822.57 points.

The week was dominated by gloomy prescriptions about the state of the US and global economy.

The International Monetary Fund trimmed its global growth forecast for the rest of the year, citing "signs of further weakness".

Federal Reserve chief Ben Bernanke gave a dark assessment of the economy but said the Fed would act if the situation gets worse, lending some support to equities.

"Despite no hint of easing, Bernanke did reiterate that the Federal Reserve was prepared to react should the economy deteriorate further," said analysts at Wells Fargo Advisors.

The data did not help improve sentiment.

US retail sales fell by 0.5 per cent last month, the Commerce Department reported.

Most analysts estimated they climbed 0.2 per cent.

US jobless claims rose almost 10 per cent from the previous week adding to fears that unemployment will remain stubbornly above eight per cent for a while longer.

The National Association of Realtors reported sales of existing, or previously occupied, homes fell 5.4 per cent in June from May, instead of an expected rise.

But company news, particularly the tech sector, provided a modest boost for markets.

Despite its first ever quarterly loss Microsoft rose 2.5 per cent after announcing it would part company with NBC News, pulling out of their joint venture MSNBC to launch its own online news service.

Yahoo! was up 1.1 per cent after announcing it had hired key Google executive Marissa Mayer to helm the company.

Banks stocks were battered however, amid a fresh wave of scandals over unethical behaviour.

JPMorgan ended the week down six per cent, Citigroup was down almost three per cent, Goldman Sachs was down 3.4 per cent and Morgan Stanley lost more than nine per cent.

The S&P 500 ended the week up 0.4 per cent while the Nasdaq was up 0.6 per cent


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