Makets rally on IBM news and senate race
Higher than expected earnings from IBM on Tuesday helped propel stocks in the later part of trading. IBM reported a 9% increase in profit that totaled to $4.81 billion, or $3.59 per share. A tightly contested senate seat in Massachusetts sparked investors to buy stock in health care companies boosting indexes by days end. The senate seat has a chance to go to a Republican in what would amount to a blocking of historic health care legislation. A blocking of the legislation would mean less taxes levied on medical and pharmaceuticals translating into more profits for those respective companies.
On the heels of this news The S&P Healthcare Index climbed nearly 2 percent, including drug company Eli Lilly (NYSE:LLY), which rose 5 percent. Health insurers Humana Inc (NYSE:HUM) rose 3.6 percent to $50.30 and Aetna Inc (NYSE:AET) gained nearly 4 percent to $32.59.
Citigroup Inc (NYSE:C) was surprisingly up 3 percent at $3.53 as it announced 4 Quarter profit losses of $7.8 billion dollars. The attributed the loss to repayment of federal TARP monies and its credit sector. Investors are eagerly awaiting a slew of reports due this week from banking giants such as Wells Fargo (WFC), Bank of America (BAC), Morgan Stanley (MS), American Express (AXP) and some 53 other regional banks all this week.
McDonald’s was given an upgrade as Credit Suisse said it’s international businesses is a potential driver of earnings; Finally the long and drawn out drama between Kraft Foods and English candy maker Cadbury finally came to an end as it’s board approved a $19.5 billion dollar takeover.
The Dow Jones gained triple digits added 115.78 points to close at 10,725.40. The S&P 500 gained 14.20 points closing at 1,150.20 while the Nasdaq rose 32.41 points to end the day at 2,320.40.
Gold rose $9.50 to settle at $1,140 an ounce at I’ll ways off of the all time high last month of $1,218.30 an ounce last month. Oil rose $1.02 to settle at $79.02 a barrel.
In Europe France’s CAC 40 closed 32.31 ahead finishing at 4,009.67. Germany’s DAX gained 57.93 points to close at 5,976.48 and London’s gained modestly to round out at 5,513.14. In Asia, Japan’s Nikkei closed at 10,764.90.