Stocks Opened Higher on Strong Earnings

U.S. stocks began sharply ahead on Tuesday after positive news about U.S. corporate earnings and the homebuilding industry. The Dow Jones Industrial Average lately rose 105.13 points, or 0.81%, to 13,026.54. The S&P 500 climbed 10.09 points, or 0.74%, to 1,379.66. The Nasdaq Composite gained 29.40 points, or 0.98%, to 3,017.80.

Goldman Sachs Group Inc reported higher-than-expected quarterly earnings thanks to aggressive cost-cutting and strong investment banking and trading revenues, and the Wall Street bank raised its dividend. Goldman earned $2.1 billion, or $3.92 per share. In the year-ago period, which was generally stronger for investment banks’ trading and banking activity, it earned $4.38 per share, excluding a one-time cost for buying back preferred stock.

The Coca Cola Co. says its net income rose 8 percent in the first quarter as it sold more drinks around the world. The world’s biggest drinks maker says it earned $2.05 billion, or 89 cents per share, for the three months ended March 30. That’s compared with a net income of $1.9 billion, or 82 cents per share, in the year-ago period.

Johnson & Johnson said Tuesday that first-quarter profit jumped 12.5 percent as lower spending on research, sales and administration more than made up for a slight decrease in sales due to generic competition. The health care giant said net income was $3.91 billion, or $1.41 per share, up from $3.48 billion, or $1.25 per share, in 2011’s first quarter. Revenue dipped 0.2 percent, to $16.14 billion from $16.17 billion.

Groundbreaking on homes fell unexpectedly in March, but permits for future construction rose to their highest level in 3 1/2 years, Commerce Department data showed on Tuesday. Housing starts slipped 5.8 percent to a seasonally adjusted annual rate of 654,000 units, the government said. February’s starts were revised down to a 694,000-unit pace from a previously reported 698,000 unit rate.

The International Monetary Fund is more optimistic about the global economy after seeing faster U.S. growth and a co-ordinated effort in Europe to address its debt crisis. The global lending organization says the U.S. economy should expand 2.1 per cent this year. Europe will likely shrink 0.3 per cent and the world economy should grow 3.5 per cent. All three of the IMF’s estimates are slightly better than its January’s forecasts.

Spain sold more than €3.2 billion ($4.2 billion) in short-term debt Tuesday with demand strong but interest rates sharply higher, reflecting continuing investor concern over the country’s finances. The Treasury paid a yield 2.6 percent on selling €2.1 billion ($2.7 billion) in 12-month notes compared to 1.4 percent in the last such auction March 20. It paid 3.1 percent to sell €1.1 billion ($1.4 billion) in 18-month-bills, up from 1.7 percent.