Stocks rise on earnings and retail reports

By
Stephen Bernard, AP Business Writer
July 14, 2009, 10:38 AM ET
3 min read

NEW YORK -- Stocks are mostly higher following better-than-expected earnings reports from Johnson & Johnson and Goldman Sachs and an upbeat reading on retail sales.

Goldman SachsGS says it earned $4.93 per share in the second quarter, easily surpassing analysts' expectations for a profit of $3.54 per share.

Meanwhile, government data shows wholesale prices rose by a larger-than-expected 1.8% in June. Retail sales also rose in June by the largest amount in five months.

Overseas markets rose Tuesday amid optimism about improvements in the banking sector and hopes for an economic recovery.

Johnson & Johnson's JNJ second-quarter results added to futures' gains, after the health care products maker said profit fell 3.5%, but handily topped analysts' expectations. Johnson & Johnson was able to offset lower sales with cost savings.

The better-than-expected report from Goldman helped bolster U.S. markets that are looking to build on Monday's gains.

Goldman kicks off a string of high-profile bank earnings reports for the week. JPMorgan Chase JPM, Bank of AmericaBAC and CitigroupC are all expected to report second-quarter results later in the week.

Investors will be looking at earnings for signs that the banking sector has stabilized after last fall's near collapse. In a sign that the sector has not fully recovered, CIT GroupCIT, a lender to small and midsized business, is talking with the government about receiving emergency assistance to help solve liquidity problems.

Aside from Goldman and J&J, investors will get quarterly results later Tuesday from chipmaker IntelINTC and fast-food restaurant operator Yum Brands YUM.

Investors will try to sustain positive momentum Tuesday after a month of mixed trading. The Dow jumped 2.3% Monday in relatively thin trading volume. It was the best performance for the blue chips since June 1, and all 30 components of the index rose on the same day for the first time since late March.

Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.40% from 3.35% late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.19% from 0.16% late Monday.

The dollar mostly fell against other major currencies, while gold prices fell.

Oil prices rose amid signs Asia might be emerging from its economic slump and demand would again rise. Oil rose $1.38 to $61.07 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average gained 2.3%. In afternoon trading, Britain's FTSE 100 rose 1.1%, Germany's DAX index rose 1.4%, and France's CAC-40 gained 1.1%.