US stocks mostly up on earnings

New York - Wall Street stocks moved mostly higher in early trade Tuesday following solid earnings and a large tobacco merger as investors awaited comment from the head of the US Federal Reserve.

About 35 minutes into trade, the Dow Jones Industrial Average advanced 34.55 points (0.20%) to 17 090.

The broad-based S&P 500 gained 2.23 (0.11%) to 1 979, while the tech-rich Nasdaq Composite Index slipped 1.18 (0.03%) at 4 439.

Earnings for Dow components Goldman Sachs, Johnson & Johnson and JPMorgan Chase all exceeded expectations.

Meanwhile, US tobacco giant Reynolds American said it will buy Lorillard for $27.4bn and sell cigarette brands including Salem and Winston to British firm Imperial Tobacco for $7.1bn.

Reynolds said the deal would bolster its position in the US market and in the growing e-cigarette category. Reynolds shares fell 3.9%, while Lorillard sank 8.0%.

Meanwhile, the Commerce Department reported that US retail sales rose only 0.2% in June, below expectations for a 0.7% gain. However, the agency upgraded its estimate for May retail sales growth from 0.3% to 0.5%.

Investors are keeping close watch on Capitol Hill, where Fed Chair Janet Yellen kicks off two days of testimony.

Markets are especially keen for any clues on whether the Fed will push up its timeframe for raising benchmark interest rates, currently expected in mid-2015.

JPMorgan advanced 3.6% despite a 7.9% drop in earnings due to lower trading and mortgage results. The earnings translated into $1.46 per share, well above analyst estimates for $1.29.

Goldman Sachs rose 1.1% as earnings of $4.10 per share beat analyst expectations for $3.05. Strong results in underwriting and Goldman's own investments offset a hit from lower trading fees for clients.

Johnson & Johnson dipped 1.4% despite reporting earnings of $1.66 per share, better than the $1.55 projected by analysts.

Hewlett-Packard announced that non-executive chairman Ralph Whitworth was stepping down for health reasons. Shares advanced 0.7%.

Specialty chemical producer Albemarle will acquire peer Rockwood Holdings in a deal valued at $6.2bn. The combination will expand the companies' broader customer reach and lead to a stronger financial foundation, the companies said.

Albemarle fell 0.9%, while Rockwood shot up 11.4%.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.55% from 2.54% Monday, while the 30-year edged up to 3.38% from 3.37%. Bond prices and yields move inversely.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot