Shares climb on earnings; U.S. Treasuries fall

Wed Apr 22, 2015 4:26pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - Stocks in major markets drifted higher on Wednesday as investors took an optimistic view of the latest batch of U.S. corporate earnings, while U.S. Treasury prices declined after home sales data added to anticipation of a rate hike by the U.S. Federal Reserve later this year.

Wall Street struggled to find its footing in morning trading as quarterly earnings continued their early trend of companies topping earnings estimates but falling short of revenue expectations. Equities slowly climbed in later trading to leave the benchmark S&P 500 index 0.55 percent below its intraday record set on Feb. 25.

"People are seeing the negative effects of foreign exchange and that's not been drastically worse than expected," said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta.

"They’re going back and looking at company fundamentals. Today you’re getting a bit of 'glass is half full.'"

U.S. Treasury prices extended earlier declines after a stronger-than-anticipated 6.1 percent climb in domestic home resales in March increased expectations the Fed would hike interest rates later this year. In addition, a selloff in German Bunds caused investors to reduce their holdings in other low-risk government debt.

The Dow Jones industrial average rose 88.68 points, or 0.49 percent, to 18,038.27, the S&P 500 gained 10.67 points, or 0.51 percent, to 2,107.96 and the Nasdaq Composite added 21.07 points, or 0.42 percent, to 5,035.17.

Benchmark 10-year notes were last down 20/32 in price to yield 1.984 percent after touching a 3-1/2 week high yield of 1.993 percent. The 10-year German yield, close to falling to zero last week, was last at 0.163 percent, doubling in three sessions.

European stocks pulled back from earlier highs to finish just below the unchanged mark, with a series of weak company earnings reports halting a two-day winning streak.   Continued...

Traders work on the floor of the New York Stock Exchange April 17, 2015. REUTERS/Brendan McDermid