Dow rallies on U.S. manufacturing data, auto sales in focus
U.S. equity markets were higher Tuesday as investors welcomed a rise in U.S. manufacturing activity and digested a mixed batch of corporate earnings.
As at 2.35pm EDT, the Dow Jones Industrial Average was up 0.82% at 13,322.69, the S&P 500 was up 0.96% at 1,411.38 and the Nasdaq was 0.71% higher at 3,068.38.
In China, manufacturing data that showed continued recovery also helped ease concerns.
In corporate news, gains in U.S. auto sales over the past six months eased in April, with General Motors (NYSE:GM) and Ford Motor Co. (NYSE:F) both doing less business.
Chrysler Group continued to log double-digit gains and foreign brands such as Volkswagen also did well. GM’s sales fell 8.2 percent to 213,387 vehicles in April.
Ford said its U.S. sales fell 5 percent to 180,350 vehicles. The automaker’s results were hurt by a 44 percent plunge in sales of its smallest car, the Fiesta, and slower sales at its Lincoln luxury car brand.
Sears Holding Corp. (NASDAQ:SHLD) said Tuesday it expects a first-quarter profit due to an after-tax gain from the sale of some of its U.S. and Canadian stores, though comparable-store sales are anticipated to fall. Sales of the company advanced more than 18%.
Pfizer (NYSE:PFE), the world's biggest drugmaker, said Tuesday that first-quarter profit fell 19 percent as new generic competition to its cholesterol drug Lipitor ate into U.S. sales.
The maker of Viagra said net income was $1.79 billion, or 24 cents per share, down from $2.22 billion, or 28 cents a share, a year earlier. Excluding one-time items, would have made $4.43 billion, or 58 cents per share. Revenue totalled $15.4 billion, down 7 percent from $16.5 billion a year ago.
Analysts were expecting a profit of 56 cents per share on revenue of $15.46 billion, according to FactSet.
Oil giant BP (NYSE:BP)(LON:BP) posted an 18 percent drop in earnings as its downstream business, which sells fuels, lubricants and fertilizer, struggled.
Adjusted first-quarter earnings fell to $4.8 billion from $5.5 billion a year earlier. The average estimate of 11 analysts surveyed by Bloomberg was for profit of $5 billion on that basis.
Satellite radio company Sirius XM (NASDAQ:SIRI) brought in revenue of $805 million in the first quarter, up from $724 million a year earlier, and above analysts' estimates of $803.83 million. Shares were up 2.4%.
Restaurant chain P.F. Chang's (NASDAQ:PFCB) is being acquired and taken private in a deal valued at $1.09 billion.
New York's Centerbridge Partners LP will buy shares of P.F. Chang's for $51.50 each. The cash offer represents a 30 percent premium over the company's Monday closing stock price.
On the economic front, U.S. manufacturing expanded at a more rapid pace for April.
The Institute for Supply Management’s manufacturing index rose to 54.8% last month from 53.4% in March. Economists surveyed by MarketWatch had forecast the index would fall to 53.3%.
The Department of Commerce said construction spending in March increased 0.1%, but missing the 0.5% rise estimated by economists.
The figure from the previous month was downwardly revised to a decline of 1.4% from a fall of 1.1%.
Commodities
On the NYMEX, crude futures for June delivery rose $1.20 to $106.07 a barrel while gold retreated $1.80, or 0.1%, to $1,662.40 an ounce.
Europe
Britain's FTSE 100 finished up 1.3%. Markets in Paris and Frankfurt were closed for the May Day holiday.
