Stocks higher on 3Q profits; Mattel jumps
Inflation is low, earnings are high, investors are happy.
Stocks shot higher Tuesday, giving the market its biggest gain in a month. Results at Mattell, Goldman Sachs, and Johnson & Johnson were all above expectations.
It was the second day of broad gains following a down week last week. Investors had been worried headed into the third-quarter earnings season that corporate profits wouldn't be good enough to justify the run-up in stocks in recent months. While earnings haven't been out-of-the-park great, they haven't been as bad as some had feared.
Also Tuesday, the Labor Department said consumer prices rose just 0.1 percent last month, not counting food and energy costs. And gasoline prices have come down since then. Low inflation leaves consumers with more money to spend, and leaves the Federal Reserve free to continue its efforts to boost the economy.
In early afternoon trading, the Dow Jones industrial average was up 118 points at 13,542. The Standard & Poor's 500 index rose 14 points to 1,454, and the Nasdaq composite rose 35 to 3,099.
All 10 industry groups in the S&P 500 index rose, and three stocks rose for every one that fell on the New York Stock Exchange.
Toy maker Mattel jumped 4.5 percent after reporting that brisk sales of American Girl dolls and Fisher-Price toys sent the company's profit well above analysts' forecasts. The stock was up $1.58 to $37.
Johnson & Johnson rose 80 cents to $69.40 after its revenues came in ahead of Wall Street's forecasts. IBM, CSX and Intel report after the bell. Intel was up 49 cents, or 2.2 percent, to $2.22.
Among other stocks making big moves:
Citigroup rose 39 cents $37.05 following the sudden departure of CEO Vikram Pandit, who had steered the bank through the 2008 financial crisis. Pandit, who is also stepping down from the company's board, is being replaced by longtime Citi executive Michael Corbat.
A123 Systems Inc., a maker of electric batteries for vehicles, put its U.S. operations into Chapter 11 bankruptcy protection and said its automotive assets will be acquired by Johnson Controls for $125 million. A123's stock plunged 18 cents to 6 cents.
The yield on the benchmark 10-year Treasury note rose to 1.71 percent from 1.67 percent late Monday.
European markets also rose. Benchmark indexes were up 1.6 percent in Germany, 2.4 percent in France and 1.1 percent in Britain.
The euro rose to almost $1.31 against the dollar from $1.29 the day before.