News Column

Market logs best week of the year

February 15, 2014

STEVE ROTHWELL; STEVE ROTHWELL The Associated Press

NEW YORK - The stock market closed out its best week of the year on Friday as investors focused on company earnings and brushed off another weak economic report.

Campbell Soup climbed after reporting earnings that beat the estimates of Wall Street analysts. Cliffs Natural Resources, a mining company, also jumped after its earnings beat analysts' expectations and the company named a new chief executive officer.

The Standard & Poor's 500 has wiped out almost all of its loss for the year after a big slump in January, and it is now just 10 points below its record close of 1,848 on Jan. 15.

Stocks slumped last month because of concerns about the outlook for growth in China and other emerging markets and worries about the health of the U.S. economy.

"For all practical purposes, we're back," said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets. "We've effectively recovered this pullback."

For the week, the S&P 500 rose 2.3 percent. The Nasdaq composite rose to 4,244.03, its highest close since July 2000.

The stock market got a lift on Tuesday when Janet Yellen, the new head of the Federal Reserve, said she would continue the central bank's low-interest rate policies and as Congress moved toward raising the U.S. borrowing limit without the political drama of last year.

The stock market started lower Friday after news that U.S. factory output fell sharply in January. Manufacturers made fewer cars and trucks, appliances, furniture and carpeting, as the recent cold spell ended five straight months of increased production.

The Federal Reserve said factory production plunged 0.8 percent in January, following gains of 0.3 percent in both December and November.

Investors are hopeful that much of the weakness seen in recent economic reports is due in large part to the unusually cold winter weather this year, said Kristina Hooper, U.S. investment strategist at Allianz Global Investors.

Among the big gainers, Campbell Soup rose $2.04, or 5 percent, to $43.01 after the company reported that its second-quarter profit and revenue came in above Wall Street's expectations. Campbell Soup also stood by its 2014 forecasts for sales and earnings growth. Cliffs Natural Resources climbed $1.26, or 5.8 percent, to $23.16 after its own earnings beat analysts' forecasts.

About 80 percent of the companies in the S&P 500 have now reported earnings for the fourth quarter, according to S&P Capital IQ. Earnings are forecast to rise 7.8 percent compared with the same period a year ago and 5.6 percent in the third quarter of 2013.

Among the day's losers were clothing retailer Men's Wearhouse and Weight Watchers International.

Men's Wearhouse dropped $2.46, or 5.3 percent, to $44.07, after Jos. A. Bank Clothiers, which Men's Wearhouse had been pursuing, announced a deal of its own. Jos. A. Bank said that it was buying the parent company of Eddie Bauer.

Weight Watchers plunged $8.48, or 27.7 percent, to $22.10 after reporting a big drop in earnings that was worse than analysts' had been forecasting. The company also issued a weak earnings forecast, saying 2014 would be a "very challenging year."

U.S. financial markets will be closed Monday for Presidents' Day.


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Source: Telegraph-Herald (Dubuque, IA)


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