US stocks up on encouraging profits

NEW YORK: US stocks posted modest gains Thursday as disappointing economic data took some of the shine off mostly encouraging earnings reports, including from heavyweights Apple and General Electric.

The Dow Jones Industrial Average was up 30.77 points (0.25 percent) at 12,484.31 by 1605 GMT, after closing near a three-year high Wednesday.

The tech-rich Nasdaq Composite gained 15.53 points (0.55 percent) to 2,818.04, while the broad-market S&P 500-stock index climbed 6.31 points (0.47 percent) to 1,336.67.

"The US equity markets remain modestly higher in late-morning action despite a smaller-than-forecasted decline in weekly initial jobless claims, and a sharp drop in a read on the Philly Fed Manufacturing Index," Charles Schwab analysts said in a client note.

Initial jobless claims fell by 13,000 to 403,000 in the week ending April 16, the Labor Department reported.

The average analyst estimate was for new claims to return to the under-400,000 level -- falling to 390,000 -- after an unexpected jump in the previous week.

"The nice, clear downward trend that had been in force has made a U-turn around the 400K mark," said Robert Brusca at FAO Economics.

A manufacturing survey also dented momentum. The Federal Reserve Bank of Philadelphia showed a sharp slowdown in regional growth in April.

But investors appeared to focus on a mainly positive array of financial results.

"The summation on the latest batch of earnings reports reads very much like the one offered yesterday," said Patrick O'Hare at Briefing.com.

"There was a glowing report from the headliner -- ie, Apple -- and there has been a litany of better-than-expected results cutting across economic sectors."

Apple reported forecast-smashing results. The gadget maker said after Wednesday's market close that it nearly doubled its quarterly net profit on record iPhone sales and revenue soared 83 percent.

Apple chief executive Steve Jobs said the company was "firing on all cylinders." Investors appeared to agree: Apple shares bounced 3.1 percent higher to $352.88.

US conglomerate General Electric on Thursday posted a nearly 80 percent jump in net profit in the first quarter compared with the same period a year ago, sharply topping market expectations.

But shares in GE, considered a bellwether of the US economy because of its sprawling businesses, fell 1.9 percent to $20.01.

The action came as investors face a three-day Easter holiday weekend. The financial markets will be closed Friday.

"Typically, the stock market rallies ahead of a long weekend as traders often move to cover some short positions," said Frederic Dickson at DA Davidson & Co.

On Wednesday, the Dow closed up 1.52 percent at 12,453.54, the highest closing level for the blue-chip index since June 5, 2008, as investors cheered robust earnings reports.

The bond market firmed. The yield on the 10-year Treasury fell to 3.37 percent from 3.40 percent late Wednesday, while that on the 30-year Treasury dropped to 4.43 percent from 4.45 percent.

Bond yields and prices move in opposite directions. (AFP)