With Wednesday's gains, all three major indexes are now in positive territory for July. -- FEC

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Date Posted: 16:05:27 07/18/12 Wed
Author: U.S. Stocks Close Higher, Erasing July's Losses (home construction rising 6.9%)
Subject: With Wednesday's gains, all three major indexes are now in positive territory for July.

U.S. Stocks Close Higher, Erasing July's Losses
19/07/2012 6:30AM

By Jonathan Cheng

Investors pushed stocks sharply higher Wednesday, erasing all of July's losses, as investors reacted to strong corporate earnings and continued hopes for central-bank intervention.

The Dow Jones Industrial Average rose 103.16 points, or 0.81%, to 12908.70, while the Standard & Poor's 500-stock index tacked on 9.11 points, or 0.67%, to 1372.78--bringing that index to within a hair of a fresh two-month high. The Nasdaq Composite outpaced the other two measures as technology stocks soared, adding 32.56 points, or 1.12%, to 2942.60.

With Wednesday's gains, all three major indexes are now in positive territory for July.

Intel led the gains among Dow components, rising 83 cents, or 3.3%, to $26.21 after the blue-chip semiconductor maker topped earnings expectations, though it also lowered its full-year revenue-growth outlook, citing a more challenging macroeconomic environment.

Positive earnings news from VMWare and EMC also supported the sector. The top five gainers on the Dow were all tech names, led by Intel, Cisco Systems, Microsoft, International Business Machines and Hewlett-Packard. Each of them rose more than 2%.

Industrial stocks were also strong, after Honeywell International reported second-quarter earnings that were above estimates and raised the lower end of the range of its full-year earnings outlook. Honeywell rose 3.64, or 6.7%, to 58.18, while fellow industrial companies United Technologies and Boeing also increased.

"Wall Street has been breathing a sigh of relief, because even the companies that miss haven't missed by much. So far, we're hanging in there," said Maris Ogg, president of Tower Bridge Advisors, which manages $1 billion in assets in Conshohocken, Pa.

Financial and consumer-staples stocks pulled on the downside. Bank of America dragged on the Dow, falling 39 cents, or 4.9%, to 7.53 after the Charlotte, N.C. lender reported second-quarter earnings that exceeded forecasts but were driven by lower tax rates and lower credit costs.

The broad-market gains were supported by U.S. economic data, which showed home construction rising 6.9% last month from May to an annual rate of 760,000, better than expectations for a 5.2% monthly gain and marking the highest level in nearly four years. However, building permits for June fell 3.7% to an annualized level of 755,000, lower than Wall Street expectations.

Separately, Federal Reserve Chairman Ben Bernanke told the U.S. House Financial Services Committee it was "certainly possible" the central bank could take new steps to support the economic recovery if the jobs market doesn't show improvement. The release of the Fed's so-called "beige book" of economic conditions around the country reported weaker manufacturing and consumer spending in June, with "modest-to-moderate" growth over the past month.

European stocks finished higher after news U.K. unemployment declined. London's FTSE 100 rose 1%, while the broader Stoxx Europe 600 added 1.1% to finish at a nearly three-month high.

Crude-oil futures for August delivery added 0.7% to $89.87 a barrel, while gold for July delivery declined 1.1% to settle at $1,570.40 an ounce. The U.S. dollar strengthened against the euro but weakened against the yen.

In corporate news, VMware climbed 9.69, or 12%, to 89.98 after the virtualization-software company announced preliminary revenue and adjusted operating margins that were above earlier forecasts. The company also said Pat Gelsinger, currently president and chief operating officer at EMC, was appointed chief executive, effective Sept. 1.

EMC rose 2.16, or 9.4%, to 25.08 after backing its full-year earnings and revenue outlook while reporting quarterly earnings slightly below estimates and revenue marginally above estimates. The company also said VMware's current CEO, Paul Maritz, will join as chief strategist, effective Sept. 1.

Tiffany gained 2.38, or 4.5%, to 55.25 after Goldman Sachs upgraded its investment rating on the stock, arguing its "long-term brand franchise remains rock-solid."

Facebook bounced back by 1.02, or 3.6%, to 29.11, after a six-day slide shaved 13% off the social-networking company's share price.

Yahoo edged up 10 cents, or 0.6%, to 15.70, after reporting second-quarter earnings that beat estimates, while revenue came in a touch shy.

Vivus surged 2.54, or 9.6%, to 29.00, after the company said the U.S. Food & Drug Administration approved the company's weight-loss drug Qsymia.

Rovi tumbled 7.64, or 43%, to 10.01, after the digital-entertainment company issued worse-than-expected earnings and revenue outlooks.

Madison Square Garden fell 36 cents, or 1%, to 35.45, for its ninth decline in 10 days, after the New York Knicks decided not to retain star point guard Jeremy Lin.

Capital One Financial lost 94 cents, or 1.7%, to 54.89, after saying it will pay $210 million to settle a regulatory probe alleging the company failed to properly monitor third-party sales of consumer-credit-protection products such as identity-theft-monitoring services.

Write to Jonathan Cheng at Jonathan.Cheng@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 18, 2012 16:30 ET (20:30 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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