* Goldman posts stronger-than-expected profit, raises
* Johnson & Johnson, UnitedHealth Group increase profit
* Citigroup CEO Pandit resigns unexpectedly
* Dow up 0.9 pct, S&P 500 up 1 pct, Nasdaq up 1.1 pct
By Chuck Mikolajczak
NEW YORK, Oct 16 (Reuters) - U.S. stocks climbed on Tuesday
after stronger-than-expected quarterly earnings from such
bellwethers as Goldman Sachs and Johnson & Johnson helped ease
concerns about a dismal quarterly earnings season.
Dow components Johnson & Johnson and UnitedHealth
Group both raised their full-year profit views while
Goldman Sachs increased its dividend.
Goldman Sachs shares gained 0.4 percent to $124.97 after the
banking company posted earnings that beat expectations and
revenue that more than doubled. Goldman's results followed
earnings in the two previous sessions from Citigroup Inc,
JP Morgan Chase & Co and Wells Fargo.
Shares of Johnson & Johnson, the diversified U.S. healthcare
company, rose 1.4 percent to $69.53. In contrast, UnitedHealth
shed 1.3 percent to $56.73.
The S&P 500 is on track for its second consecutive advance,
and its best two-day run in a month on the heels of last week's
2.2 percent slide. That was the benchmark index's worst weekly
decline in four months as investors looked for more evidence on
the global economic climate from large multinational companies.
"One of the biggest things coming into this earnings
reporting season was this drumbeat for how bad it was going to
be," said Art Hogan, managing director of Lazard Capital Markets
in New York.
"We went through a period of time last week where we focused
on how bad it was going to get, and we've got a chance to get
some of that back because the worst-case scenario is not playing
The Dow Jones industrial average rose 123.43 points,
or 0.92 percent, to 13,547.66. The Standard & Poor's 500 Index
gained 14.49 points, or 1.01 percent, to 1,454.62. The
Nasdaq Composite Index advanced 33.55 points, or 1.09
percent, to 3,097.73.
Coca-Cola Co also reported a rise in earnings, but
quarterly revenue came in short of Wall Street's expectations,
hurt by declines in Europe and Asia. Its stock slid 0.8 percent
Citigroup unexpectedly announced that Chief Executive
Vikram Pandit had resigned effective immediately, along with
Chief Operating Officer John Havens. Michael Corbat, previously
chief executive for Europe, Middle East and Africa, was named to
The announcement came one day after a surprisingly strong
quarterly earnings report. Citigroup's stock gained 1 percent to
"It certainly is a bit of a shock," said Jeff Morris, head
of U.S. equities at Standard Life Investments in Boston.
"Certainly the transitioning and the messaging was more abrupt
than I think anybody would have anticipated."
As earlier profit warnings from large multinationals left
investors leery of the third-quarter earnings season, Tuesday's
earnings helped decrease concerns about the global economy.
Materials stocks, closely tied to economic fortunes, were the
S&P 500's best performers. The S&P materials index
gained 2.2 percent.
Quarterly profits of S&P 500 companies are seen dropping 2.3
percent from the year-ago period, according to Thomson Reuters
data through Tuesday morning. With about 10 p e rcent of S&P
companies having reported, 60 percent have topped profit
expectations, under the average beat rate of 67 percent for the
past four quarters.
Intel and International Business Machines Corp
are scheduled to report earnings after the closing bell.
Their results will be among the first major earnings reports
from the tech sector, which has been hit by a number of profit
warnings, including from Intel.
In Tuesday afternoon trading, Intel's stock rose 2.4 percent
to $22.26. IBM shares rose 0.8 percent to $210.54.
Economic data showed the overall U.S. Consumer Price Index
rose 0.6 percent in September as the cost of gasoline surged,
posing a threat to consumers' spending power. On the other hand,
inflation pressures look unlikely to derail the Federal
Reserve's ultra-easy policy path.