- Yahoo!, Intel impress with quarterly earnings
- Bank of America posts surprise loss
- Housing starts, building permits miss forecasts
- Industrial production exceeds estimates
Dow Jones: 0.52%
S&P 500: 0.38%
US stocks rose for the third straight day on Wednesday after well-received earnings from Yahoo! and Intel outweighed a surprise first-quarter loss reported by Bank of America.
The Dow Jones Industrial Average was trading 0.5% higher after the opening bell on Wall Street, the S&P 500
and Nasdaq rose 0.4%
Markets were largely shrugging off disappointing data from the US home construction market today, with housing starts rising less than expected and building permits falling sharply in March. Industrial production, however, expanded by more than predicted last month.
Analysts at Capital Economics said that the US economy is "now showing its true colours after the weakness triggered by the bleakest of winters. There is scope for production to rise rapidly in the coming months too".
Markets were looking ahead to a speech later this afternoon by Federal Reserve Chair Janet Yellen who will address the Economic Club of New York. The central bank will also unveil its Beige Book, a survey of economic conditions across the States.
On Tuesday Yellen said the Fed was considering further steps to force big banks to hold more capital. She cited a 2010 study by the Basel Committee, an international standard-setting body, that suggested tighter standards would provide economic benefits.
"There might be room for stronger capital and liquidity standards for large banks than have been adopted so far," Yellen said in a pre-recorded video for a financial markets conference hosted by the Atlanta Federal Reserve Bank.
Privately-owned housing starts rose 2.8% to a seasonally-adjusted annual rate of 946,000 last month. This was higher than the upwardly revised 920,000 rate in February but well under the 970,000 consensus forecast.
Meanwhile, forward-looking building permits fell 2.4% to 990,000 in March, compared with a downwardly revised 1.014m in February. Analysts had expected little change over the month.
US mortgage applications, however, rose by 4.3% in the week ended April 11th, rebounding strongly after a 1.6% fall a week earlier, according to the Mortgage Bankers' Association.
Industrial production in the States increased by 0.7% in March, down from an upwardly revised 1.2% gain the month before but ahead of the 0.5% forecast.
Yahoo!, Intel, Bank of America
Internet portal Yahoo! surged as much as 8% after the opening bell after first-quarter results were buoyed by strongly sales at Chinese e-commerce group Alibaba in which it holds a 24% stake. Non-GAAP earnings per share (EPS) were flat year-on-year at 38 cents over the three months to March 31st, but ahead of the 37 cents estimate. Adjusted revenue rose by a better-than-expected 1% to $1.09bn.
Chipmaker Intel was also higher after EPS of 38 cents exceeded expectations despite falling from 40 cents the year before.
Bank of America, however, fell after reporting a five cents-a-share loss for the first quarter, compared with a EPS of 10 cents per share the year before, after it recorded a $6bn litigation expense relating to a settlement with the Federal Housing Finance Agency and other mortgage issues. The consensus estimate was for a EPS of five cents a share.
West Texas Intermediate futures were up 0.82% at $104.60 a barrel on the NYMEX.
The yield on a 10-year US Treasury was up two basis points at 2.65%.