Strong Earnings Sent Stocks Higher
U.S. stocks started higher on Tuesday, as investors turn their focus to U.S. corporations that are reporting healthier results than analysts had expected. The Dow Jones industrial average lately gained 54.80 points to 13,172.31. The S&P 500 index rose 7.26 points to 1,401.49. The Nasdaq composite index rose 13.97 points to 3,003.88.
Government-controlled mortgage giant Freddie Mac posted net income of $1.2 billion for the second quarter and isn’t requesting any additional federal aid for the period. Its net income attributable to common shareholders amounted to 37 cents per share in the April-June period. That compares with a loss of $3.76 billion, or $1.16 per share, in the same period a year ago.
Citigroup Inc (NYS:C) may have to a take a charge of almost $6 billion in the current quarter on a markdown of its valuation of the retail brokerage business it owns with Morgan Stanley (MS), Barclays Capital said. Citi estimates the business is worth $22 billion, while Morgan Stanley pegs it at $9 billion. The bank’s valuation reflected an extremely optimistic view of the future of Wall Street profits, setting up the possibility of a multi-billion charge.
The number of companies operating in Spain fell for a fourth straight year in 2011 to a five-year low, according to data on Tuesday, highlighting the impact of the global crisis that has tipped the country into recession and made one in four jobless. The national statistics institute (INE) said the number of companies active in the euro zone’s fourth largest economy fell by 1.6 percent last year to 3.199 million, marking the fourth consecutive year of contraction.