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US stocks rise on earnings optimism

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(Globalpost/GlobalPost)

US stocks Tuesday moved higher on optimism about corporate earnings, even as the International Monetary Fund slashed its global economic growth forecast.

About 40 minutes into trade, the Dow Jones Industrial Average rose 52.31 (0.34 percent) to 15,277.00.

The broad-based S&P 500 added 6.30 (0.38 percent) to 1,646.76, while the tech-rich Nasdaq Composite Index put on 5.78 (0.17 percent) to 3,490.61.

Markets were cheered by the second quarter earnings season kickoff report from Alcoa.

Before special items, the aluminum giant's profits came in 1 cent above expectations at 7 cents per share, and the company reaffirmed its projection that global aluminum demand would grow by 7 percent in 2013. Alcoa shares fell 1.0 percent after having added 1.4 percent Monday.

IBM dropped 1.6 percent after Goldman Sachs cut its rating to "neutral" from "buy," citing pressures on IBM's growth markets and higher-margin revenue streams, according to Dow Jones Newswires.

Supermarket chain Kroger gained 2.5 percent after announcing a $2.5 billion takeover of smaller rival Harris Teeter. Harris Teeter put on 1.4 percent.

Book retailer Barnes & Noble shot up 3.0 percent after announcing that chief executive William Lynch would step down. The company's Nook tablet business has struggled in recent months.

Intuitive Surgical, which manufactures robotic systems for minimally invasive surgery, nose-dived 17.3 percent after projecting that second-quarter revenues would come in at $575 million, well below the $630 million expected by the market.

The market gains came despite the latest economic forecast from the IMF, which trimmed world economic growth expectations for 2013 to 3.1 percent from the April forecast of 3.3 percent.

China and other emerging economic powers now face new risks, the IMF warned, "including the possibility of a longer growth slowdown."

The yield on the 10-year Treasury slipped to 2.63 percent from 2.64 percent late Monday. The yield on the 30-year held steady at 3.64 percent. Bond prices and yields move inversely.

jmb/pmh

http://www.globalpost.com/dispatch/news/afp/130709/us-stocks-rise-earnings-optimism-0