Business
Stocks Climb On Fed’s Rate Forecast, Earnings
Stocks were rising Thursday after the Federal Reserve’s pledge to keep interest rates low for a prolonged period and strong earnings from several corporate heavyweights.
The Dow Jones Industrial Average was rising 45.1 points at 12,802. The S&P 500 was up 3.3 points at 1,329, and the Nasdaq was up 6.5 points at 2,824.
Stocks closed higher Wednesday after the Federal Open Market Committee announced its decision to hold interest rates low until late 2014.
Markets continued to receive some cheer from the Federal Reserve’s announcement to keep interest rates at very low levels until late 2014 to stimulate the U.S. economy. Although the announcement highlighted ongoing struggles in the economy, it also indicated that the Fed is willing to step in and help.
In corporate news, Caterpillar, the construction and mining equipment maker, handily beat expectations Thursday. The company’s fourth-quarter earnings, excluding items, came in at $2.32 a share, while analysts expected a profit of $1.73 a share. Caterpillar reported record revenue of $17.24 billion, higher than the forecast for $16.05 billion. For 2012, Caterpillar expects earnings of $9.25 a share, or a range of $68 billion to $72 billion.
Telco giant AT&T beat estimates as sales of the iPhone soared to a record high. The company gained 717,000 subscribers on monthly contracts, while iPhone activations soared to 7.6 million. Earnings fell to 42 cents a share, slight short of the forecast for 43 cents. However, sales rose 3.6 percent to $32.5 billion, beating the expectation for $31.95 billion. AT&T withdrew its $39 billion proposal to buy T-Mobile USA in December after regulators said the deal would decrease competition in the sector.
Meanwhile,3M Co reported higher-than-expected quarterly earnings on Thursday as demand from industrial and transport markets offset weak sales to makers of consumer electronics.
The maker of Post-It notes, Scotch tape and components for consumer electronics reported net earnings of $954 million, or $1.35 per share, compared with $928 million, or $1.28 per share, a year earlier.
Analysts on average were expecting a profit of $1.31 a share, according to Reuters report.
Sales rose 6 percent to $7.1 billion, matching Wall Street estimates. 3M’s industrial and transportation segment sales jumped 14 percent, reflecting healthy auto, aerospace and energy markets, among others, as well as acquisitions. Sales at 3M segments that make office supplies and health and safety also rose.
Revenue fell, however, in the display and graphics segment, hurt by what 3M called “deteriorating” demand for consumer electronics. Its electro and communications also posted lower sales.
Minneapolis-based 3M affirmed its forecast of 2012 earnings between $6.25 and $6.50 per share, saying it would focus on its bottom line in the near-term in a slower growth environment .
3M has said acquisitions would boost this year’s results. This month, it moved to expand its office supply business with the $550 million cash purchase of Avery Dennison Corp’s office and consumer products unit, which includes Avery labels and HI-LITERS markers