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Wall St up on earnings but tech, banks weigh

NEW YORK, April 21 — US stocks mostly rose yesterday, led by solid earnings from McDonald’s, General Electric and Microsoft, but declines in banks and technology shares pulled indexes from their day’s highs.

The Nasdaq Composite fell as SanDisk Corp led a drop in semiconductor shares with an 11.3 per cent slide after its second revenue warning in as many quarters.

Apple Inc’s more than 2.4 per cent fall also weighed, as shares continue to struggle ahead of earnings next week. Apple shares posted back-to-back weekly declines of more than four per cent for the first time since late December 2008.

Analysts said the weakness heading into yesterday’s close was in part because of caution ahead of an early indicator of China’s industrial activity. — Reuters file picAnalysts said the weakness heading into yesterday’s close was in part because of caution ahead of an early indicator of China’s industrial activity. — Reuters file picAs earnings season moves into high gear, the first wave of corporate results has been substantially stronger than expected. About 81 per cent of S&P 500 companies that have reported so far have beat expectations, according to Thomson Reuters data.

The impressive rate of beats comes amid lowered expectations, but the earnings have helped stocks regain their footing after a recent pullback on less-than-inspiring US economic figures and renewed worry about Europe’s debt crisis.

Analysts said the weakness heading into yesterday’s close was in part because of caution ahead of an early indicator of China’s industrial activity, expected late tomorrow.

“We already know earnings are coming in better, and the market has been up quite a bit,” said Doreen Mogavero, president and chief executive of Mogavero Lee & Co. in New York.

“The private-sector manufacturing data from China will be setting the pace for next week, so people are taking some profits off the table,” she said.

A weaker level in China’s HSBC flash purchasing managers index late in March sent equity and other risk markets lower.

The Dow Jones industrial average rose 65.16 points, or 0.50 per cent, to 13,029.26. The S&P 500 Index gained 1.61 points, or 0.12 per cent, to 1,378.53. The Nasdaq Composite dropped 7.11 points, or 0.24 per cent, to 3,000.45.

For the week, the Dow gained 1.4 per cent, the S&P 500 added 0.6 per cent and the Nasdaq fell 0.4 per cent, down for a third week running.

Bank of America Corp fell 4.7 per cent to US$8.36 (RM25.63) after a downgrade from CLSA analyst Mike Mayo. The shares led declines in the S&P financials group, the second-worst performing among the S&P 500 top 10 sectors.

Microsoft Corp jumped 4.5 per cent to US$32.42 and was the top boost to the Dow yesterday, a day after its profit report beat Wall Street’s expectations.

General Electric Co’s results drove buying in industrial shares. The company said it expects double-digit earnings for the year, which helped shares rise 1.1 per cent to US$19.36.

Industrial conglomerate Honeywell International Inc reported higher quarterly profit and raised its 2012 earnings forecast. The stock rose 2.4 per cent to US$59.39.

The S&P industrial sector index, up 0.8 per cent, was a top boost to the S&P 500.

McDonald’s Corp edged up 0.7 per cent to US$95.94 after the world’s No. 1 fast-food chain reported higher quarterly profit, helped by strong US sales.

About 6.68 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE Amex, just shy of the 6.78 billion daily average so far this year.

Almost two issues rose on the NYSE for every one that fell, and despite the day’s decline, three issues rose for every two that fell on the Nasdaq. — Reuters

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