Stocks Climb Wall Of Worry To Multi-Year Highs.
Bloomberg NewsBy John Shipman and Paul Vigna
Based on the stock market’s strong rally, emboldened by the encouraging January jobs report, it would seem investors think earnings growth is poised to bounce back into double-digit percentage gains.
Not so fast.
The fourth-quarter earnings growth rate for the S&P 500 is running at 8.4%, or 5.3% if Apple’s results are excluded, according to Thomson Reuters I/B/E/S.
Thomson says 43 S&P 500 companies have had negative EPS preannouncements for the current quarter compared to 12 positive EPS preannouncements.
“The 3.6 negative to positive ratio is the largest showing since the 3.7 ratio in Q2 2001,” firm says.
Nevertheless, stocks finish near session highs after the market gets the best “upside surprise” it’s had in some time: a blowout jobs report.
The Dow Jones Industrial Average rose 156.82 points, or 1.23%, to 12862.23, its highest close since May 2008. S&P 500 jumps 19.36 points, or 1.46%, to 1344.90.
Nasdaq Comp rises 45.98 points, or 1.61%, to 2905.66, its highest close since December 2000.
Stocks are enjoying their best start to a year in two decades, and the bulls are in firm control here. So forget, for now, the euromess. Forget, for now, the weak profit growth and poor outlooks for the first quarter.
Just enjoy the ride.
AI
