Thursday, April 9, 2009

US Stocks Soars On Wells Fargo’s Earnings Outlook, BofA Rallies

. Thursday, April 9, 2009

By stockOzone team

Wall Street finished with solid gains on Thursday after Wells Fargo projected first quarter earnings that beat consensus estimates.

The Dow Jones Industrial Average rallied 246.27 points or 3.14% to finish at 8,038.38. The S&P 500 increased 31.40 points or 3.81% to end at 856.56. The Nasdaq Composite advanced 61.88 points or 3.89% to 1,652.54.

Thursday's rally helped indexes to finish with gains for fifth straight week. For the week, Dow was up 65.79 points or 0.82%. S&P rose 14.06 points or 1.67%, while Nasdaq Composite settled with a weekly gain of 30.67 points or 1.85%. Trading is closed on Friday for the Good Friday holiday.

Shares of Wells Fargo & Co. (NYSE: WFC) jumped $4.72 or 31.70% to $19.61 after it said that it expects to report first quarter profit of roughly $3 billion, or 55 cents a share. Analysts on average are currently expecting, earnings of 31 cents a share. The bank said that it expects revenue to climb roughly 16% to $20 billion. Wells Fargo is due to report its first-quarter results on April 22.

Bank of America (NYSE: BAC) soared $2.49 or 35.27% to $9.55. JP Morgan (NYSE: JPM) climbed $5.32 or 19.39% to $32.75. Shares of credit card lender American Express (NYSE: AXP) rallied $3.11 or 19.78% to $18.83.

The largest US aluminum maker Alcoa Inc. (NYSE: AA) advanced 79 cents or 9.80% to $8.85.

Industrial stocks finished higher. Equipment maker Caterpillar Inc. (NYSE: CAT) gained $2.95 or 9.98% to end at $32.52.Shares of diversified US conglomerate General Electric (NYSE: GE) rose 69 cents or 6.48% to $11.33.

Shares of embattled US automaker General Motors Corp. (NYSE: GM) rose 11 cents or 5.70% to $2.04.

Wal-Mart Stores Inc. (NYSE: WMT) reported same store sales that fell short of analyst estimates. The retail giant said that same-store sales in the U.S. rose 1.4%, excluding fuel. Analysts on average were looking for increase of 3.2%. Shares of the retail giant plunged $1.95 or 3.71% to $50.66.

Shares of Textron Inc. (NYSE: TXT) surged $4.45 or 48.85% to $13.56 on media reports that a consortium of United Arab Emirates companies and a Kuwaiti firm is close to a deal to buy US aircraft manufacturer and defense contractor.

Late on Wednesday, Moody's Investors Service cut its credit ratings on Berkshire Hathaway Inc. (NYSE: BRK-A) from Aaa to Aa2, saying that "extraordinary market pressures have reduced the excess cushion available from National Indemnity and the other affected operations to support potential funding needs of the parent company."

On the front of economic data, a release by Department of Labor, number of Americans filing first- time claims for unemployment benefits increased 12,000 to 669,000 in the week ending March 28. Economists had forecast jobless claims to rise to 650,000. The four-week average of seasonally adjusted initial jobless claims, a less volatile gauge, rose 6,500 to 656,750. Continuing claims for the week ending March 21 climbed 161,000 to a record 5.73 million.

According to Commerce Department, U.S. trade deficit narrowed to $26 billion, the smallest since 1999 as imports of goods and services declined 5.1% to $152.7 billion.

Overseas, Asian stock markets finished with strong gains. European stocks too settled higher on Thursday. Crude Oil gained over 5%.

Disclosure: Author does not own any of the stocks discussed here.

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