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US STOCKS-Wall St climbs on earnings optimism
July 9, 2013 / 2:05 PM / 4 years ago

US STOCKS-Wall St climbs on earnings optimism

* Tesla rises on news it is to be added to Nasdaq 100 index

* Intuitive Surgical slumps after revenue forecast

* Barnes & Noble CEO resigns, shares rise

* Indexes up: Dow 0.46 pct, S&P 0.51 pct, Nasdaq 0.24 pct

By Chuck Mikolajczak

NEW YORK, July 9 (Reuters) - U.S. stocks opened higher in a broad advance on Tuesday, putting the S&P 500 on pace for a fourth straight climb, after Alcoa’s earnings caused moderate optimism at the start of the earnings season.

Alcoa Inc, the first Dow component to report for the second quarter, announced late on Monday adjusted profit and revenue above Wall Street’s forecasts. It also said it sees solid growth in global demand for its products this year.

While Alcoa shares gave up initial gains to trade down 0.6 percent to $7.87, the S&P materials index rose 1 percent.

The earnings report boosted confidence for an earnings season currently forecast to show lackluster growth, with each of the 10 S&P sectors in positive territory.

”The Alcoa numbers were OK, they weren’t knock your socks off,“ said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. ”What we are seeing here is some recovery from last month still and optimism about upcoming earnings.

“I have a feeling this will be another one of those seasons where any miss and companies get whacked.”

According to Thomson Reuters data through Tuesday morning, analysts’ expectations call for S&P 500 earnings to grow 2.9 percent in the quarter from a year ago, while revenue is forecast to increase 1.5 percent from a year ago.

The Dow Jones industrial average gained 70.58 points, or 0.46 percent, to 15,295.27. The Standard & Poor’s 500 Index rose 8.42 points, or 0.51 percent, to 1,648.88. The Nasdaq Composite Index added 8.36 points, or 0.24 percent, to 3,493.19.

The earnings calendar remains fairly light this week until Friday, when JPMorgan Chase & Co and Wells Fargo & Co are scheduled to report.

The benchmark S&P 500 index is up 2.1 percent for the past 4 sessions as jobs and manufacturing data have helped ease concerns over the possible early pullback of stimulus measures by the U.S. Federal Reserve.

The S&P had its first monthly decline in eight months in June on concerns the Fed will begin to wind down its bond purchasing program, seen by many as a primary reason for the rally in equities this year.

The Fed is scheduled to release the minutes from its June meeting on Wednesday, which investors will eye for any clues into a possible trimming of stimulus measures.

Barnes & Noble Inc gained 4.1 percent to $18.39 after the book retailer’s Chief Executive William Lynch resigned.

Tesla Motors Inc gained 1.7 percent to $123.73 as Nasdaq OMX Group Inc said it will replace Oracle Corp on the Nasdaq 100 stock index, reflecting the rising profile of the U.S. electric car maker.

Intuitive Surgical slumped 17.3 percent to $413.92 after the maker of the da Vinci surgical robot said on Monday it expects second-quarter revenue below analysts’ expectations.

Grocery store operator Kroger Co said it would acquire Harris Teeter Supermarkets Inc in a deal valued at $2.5 billion, including debt, to expand in the U.S. Southeast and mid-Atlantic states. Kroger gained 2.6 percent to $37.12 while Harris Teeter rose 1.1 percent to $49.07.

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