By: The Associated Press//October 21, 2011
By: The Associated Press//October 21, 2011//
Stocks rose sharply early Friday after several big U.S. companies reported solid third-quarter earnings. The Dow Jones industrial average jumped 200 points.
Fast-food giant McDonald’s Corp. rose 3.3 percent, the most of any stock in the Dow, after reporting a 9 percent increase in income. The results beat analysts’ expectations and marked the ninth straight quarter of gains.
Chipotle Mexican Grill Inc. rose 5 percent after reporting a 25-percent jump in third-quarter income. The fast-casual chain raised prices, sold more burritos and opened new stores.
Harman International Industries Inc. leaped 11 percent, the most in the Standard & Poor’s 500, after the audio equipment maker’s income came in far ahead of analysts’ expectations.
The Dow rose 204 points, or 1.8 percent, to 11,746 at 10:30 a.m. Eastern time. The Standard & Poor’s 500 index rose 22, or 1.8 percent, to 1,237. The Nasdaq composite index rose 44, or 1.7 percent, to 2,642.
The rally pushed the Dow and the S&P higher for the week. They opened lower for the week Friday, after rising for the previous two. The Dow is now up 0.9 percent for the week, the S&P 1.1 percent. If the S&P closes the week higher, it will be the first three-week winning streak in eight months.
The Dow has gained 10.4 percent since hitting a yearly low on Oct. 3. The S&P is up 12.7 percent. However, the Dow remains 8.3 percent below its high for the year, reached on April 29. The S&P has declined 9.2 percent since then.
Traders are monitoring Europe’s efforts to solve the Greek debt crisis. Worries about a default by Greece have caused much of the market’s volatility in recent months.
European markets rose sharply as investors hoped that European leaders will agree on a package of measures to address the region’s debt crisis in time for a summit scheduled tentatively for Wednesday. Benchmark indexes in Germany and Italy climbed 3 percent.
Traders had hoped for a plan from a summit this weekend. But talks between France and Germany this week have broken down repeatedly. They said yesterday that there will be no deal before a second summit next week. The two countries disagree about the size of losses that private banks should take on Greek debt that they own, among other issues.
Traders sold ultra-safe U.S. Treasury debt as riskier assets rallied. The yield on the 10-year Treasury note rose to 2.24 percent from 2.18 percent late Thursday. Bond yields rise as demand for them falls and their prices decline.
Stocks have been lifted at times this week by modestly better news about the U.S. economy. The number of people claiming unemployment benefits declined this week. Housing construction picked up last month, at least for apartment buildings. Inflation remains low.
Among the companies reporting earnings late Thursday or early Friday:
— General Electric Co.’s income rose 18 percent as its lending business recovered, but profit margins shrank in key business. The stock fell 1.5 percent.
— Microsoft Corp.’s income rose 6 percent and its revenue beat Wall Street estimates. The stock edged up 0.3 percent.
— Verizon Communications Inc.’s income doubled from last year, mainly because of pension adjustments. Its adjusted earnings beat expectations. But Verizon’s bottom-line result masked a weak quarter for its local phone business, which faced a major worker strike and post-hurricane repairs. The stock fell 0.3 percent.