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US STOCKS-Wall St gains as Fed hopes offset mixed earnings

Source : REUTERS
Last Updated: Thu, Oct 24, 2013 19:20 hrs

* Ford rallies after results; AT&T, Dow Chemical lower

* PulteGroup gains after results

* Federal Reserve seen keeping stimulus for several months

* Indexes up: Dow 0.7 pct, S&P 0.4 pct, Nasdaq 0.6 pct

By Caroline Valetkevitch

NEW YORK, Oct 24 (Reuters) - U.S. stocks resumed their move higher on Thursday as optimism about monetary stimulus for the foreseeable future helped to offset mixed news on the economy and earnings.

PulteGroup Inc was among the day's biggest gainers, after the homebuilder reported results and said a slowdown in new home orders would be "short-lived." Its shares jumped 7.3 percent to $17.90, while shares of D.R. Horton Inc rose 3.2 percent to $20.09 and Beazer Homes Inc added 1.8 percent to $19.47.

"I think people want to stay invested around earnings so they don't miss upside surprises. My view on earnings is it's a bit of speculation (on whether) the report will come out way above expectations," said Bruce Zaro, chief technical strategist, Delta Global Asset Management in Boston.

The S&P 500 is on track for its 10th gain in the past 12 sessions, a rally largely driven by expectations the U.S. Federal Reserve will continue its stimulus, which has propped up stocks and the economy for much of the year. The S&P closed at a record on Tuesday, and is up 23 percent for the year so far.

The earnings season overall, though, has been marked by some weak outlooks and about 47 percent of S&P 500 companies have reported revenue below analysts' expectations.

In another sign the economy wasn't firing on all cylinders, initial claims for state unemployment benefits fell less than expected in the latest week. The preliminary read of Markit's Manufacturing Purchasing Managers Index grew at its slowest pace in a year this month and factory output contracted for the first time since late 2009.

The S&P has risen about 1.5 percent since politicians ended a stalemate to avoid a debt default and end a partial government shutdown, culminating in a record high on Tuesday, but the damage to the economy has led investors to expect the Fed to delay scaling back its stimulus for several months.

The Dow Jones industrial average was up 108.53 points, or 0.70 percent, at 15,521.86. The Standard & Poor's 500 Index was up 6.86 points, or 0.39 percent, at 1,753.24. The Nasdaq Composite Index was up 24.48 points, or 0.63 percent, at 3,931.56.

Ford shares rose 1.9 percent to $17.84 after the automaker boosted its full-year global earnings and margin outlook, helped by an improved forecast in Europe and better-than-expected third quarter results.

Also on the rise were Apple shares, up 1.4 percent at $532.26, after investor Carl Icahn, in a public letter to Apple Chief Executive Tim Cook, called on Apple to commence a $150 billion share buyback immediately.

On the downside, both AT&T and Dow Chemical fell after results missed expectations. AT&T, a Dow component, fell 1.5 percent to $34.73 while Dow Chemical lost 0.7 percent to $40.74 after its results. Xerox slumped 10.3 percent to $9.63 after a weak outlook.




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