Stocks Edge Higher on Earnings Reports

07.13.2004
Associated Press

Strong results from Johnson & Johnson and the banking sector revived investors' optimism about earnings Tuesday, and stocks moved slightly higher as second-quarter reports began in earnest.

Investors began warming up to earnings after a series of warnings from the tech sector drove stocks lower last week. Johnson & Johnson's report was particularly good news given the company's strong consumer division, since consumer spending is a key barometer of economic health.

However, many investors were waiting for earnings from technology bellwether Intel Corp., due after the session, for a better read on the health of the tech sector.

The Commerce Department's latest report on the nation's trade deficit gave the market a lift. The trade deficit narrowed to $46 billion in May, dropping 4.5 percent from April's all-time high. U.S. exports had their best month on record, the department said, helped in part by a weaker dollar.

In the first hour of trading, the Dow Jones industrial average rose 14.97, or 0.2 percent, to 10,253.19.

Broader stock indicators were narrowly higher. The Standard & Poor's 500 index gained 1.45, or 0.1 percent, to 1,115.80, and the Nasdaq composite index was up 5.52, or 0.3 percent, at 1,942.44.

Johnson & Johnson saw its sales climb 11.1 percent from a year ago, crediting it pharmaceutical and medical devices for the rise. The company earned $2.5 billion in the quarter, beating Wall Street estimates by 3 cents per share. J&J climbed 52 cents to $55.41.

Merrill Lynch & Co. lost 10 cents to $51.37 after missing Wall Street expectations by 3 cents per share for the second quarter due to losses from investment banking and overseas businesses. The rest of the financial sector was mixed even as three banks all beat expectations for the quarter. BB&T Corp. was up 50 cents at $37.88, AmSouth Bancorp fell 17 cents to $24.62 and Commerce Banc dropped $1.32 to $53.86.

Newspaper publisher Gannett Co. announced earnings that were in line with estimates, boosting profits by 9 percent from a year ago. But Media General Inc., which runs broadcast stations and major metropolitan newspapers, missed its estimates by 6 cents per share. Gannett surged $1.86 to $83.25, while Media General slipped 30 cents to $62.30.

The Russell 2000 index of smaller companies was up 1.14, or 0.2 percent, at 563.38.

Overseas, Japan's Nikkei stock average rose 0.2 percent. In afternoon trading, Britain's FTSE 100 was up 0.1 percent, Germany's DAX index gained 0.6 percent, and France's CAC-40 climbed 0.4 percent.

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