Stocks Continue to Climb as Companies Exceed Expectations
NEW YORK (TheStreet) -- Major U.S. stock averages rose Friday, with all three key indices ending the week higher, as Procter & Gamble(PG) shares popped after an upbeat earnings forecast. AT&T(T) also advanced after the company posted a narrower quarterly loss.
Microsoft(MSFT) shares posted a modest rebound after initially slumping following its earnings announcement.
Investing sentiment was helped as business confidence in Germany improved for a third month in January, according to the Ifo think tank's business climate index, which jumped to 104.2 from 102.4 in December.
In addition, the European Central Bank said Friday that 278 banks in the eurozone indicated they will repay, early, €137.2 billion in three-year loans, issued a little over a year ago.
The amount was larger than expected and pointed to easing financial conditions in the region. As Marty Mitchell, a head trader at Stifel Nicolaus said, suggested: "More stability in Europe and the potential for an improved risk appetite in markets."
The Dow Jones Industrial Average rose 71 points, or 0.5%, to 13,896. The blue-chip index gained 1.8% for the week.
Breadth was positive in the Dow as winners outpaced losers 23 to seven. Top percentage blue-chip gainers included Procter & Gamble, JPMorgan (JPM) , Johnson & Johnson (JNJ) , General Electric (GE) and Merck (MRK) .
Procter & Gamble shares gained 3.9% after the company on Friday said it increased its core earnings per share guidance for the year to $3.97 to $4.07 amid "strong productivity improvement and resulting cost savings." The company also increased its outlook for share repurchases to $5 billion to $6 billion.
P&G recorded fiscal second-quarter earnings of $1.22 a share on revenue of $22.2 billion, topping the average analyst estimate of $1.11 a share on revenue of $21.91 billion.
Microsoft received a boost in its fiscal second quarter from its server & tools division and Windows 8 licenses, helping it post earnings that topped Wall Street expectations. Overall results were mixed, however, causing the stock to fall after the release Thursday evening. Shares recovered ground Friday, up 0.9%.