Stocks Rise on Bank Earnings, Strong Jobs Data

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NEW YORK (TheStreet) -- Stock rose Thursday following a substantial dip in jobless claims data and encouraging earnings results from Bank of America and Morgan Stanley .

The Dow Jones Industrial Average gained 45 points, or 0.4%, to finish at 12,624. The S&P 500 rose 6.5 points, or 0.5%, to settle at 1,314.50, while the Nasdaq gained 19 points, or 0.7%, to close at 2,788.

Thursday was a busy day for fourth-quarter corporate earnings, with fourth tech titans reporting after the close. Google reported earnings per share of $9.50 on revenue of $8.83 billion. Shares fell in late trades as Wall Street was looking for a profit of $10.49 per share.

Shares of Intel and IBM rose in the extended session. IBM reported earnings of $4.71 per share on revenue of $29.9 billion, topping the average analysts' forecast for a profit of $4.62 per share in earnings.

Intel's revenue came in at $13.9 billion, topping the $13.7 billion expected by analysts. The company's earnings were 68 cents a share, beating the 61 cents expected.

Microsoft reported earnings per share of 78 cents a share on revenue of $20.9 billion. Analysts had expected 76 cents a share in earnings.

Financial stocks helped buoy the market Thursday. Bank of America , which lost its status as the U.S.'s largest lender by assets to JPMorgan Chase last quarter, reported in the morning that it earned $2 billion, or 15 cents a share, in the fourth quarter, in line with analysts' expectations, according to Thomson Reuters. Bank of America shares rose 2.4% to $6.96.

Morgan Stanley posted a fourth-quarter loss of 14 cents a share when analysts had forecast a loss of 58 cents. Shares climbed 5.4% to $18.28.

Also helping sentiment was a Labor Department report showing that the number of Americans filing for first-time unemployment benefits fell to the lowest level since April 2008. Initial jobless claims dropped 50,000 to 352,000 from a revised 402,000. Economists expected claims to fall to 383,000.

"One week is not a trend, but this continues a clear downshift in claims, which emerged towards the end of last year when businesses realized that the meltdown in demand they feared, in the wake of the drop in consumers' confidence, had not happened," Ian Shepherdson, chief economist at High Frequency Economics, wrote. "It is just about inconceivable that such a sustained downshift would not be followed quickly by substantially faster payroll gains."

In a sign that inflation is easing, the Bureau of Labor Statistics said that consumer prices stayed put in December. Analysts expected the consumer price index to climb 0.1%, according to estimates from Zacks.com.

Housing starts fell 4.1% to an adjusted annual rate of 657,000 units in December from a revised 680,000 in November, according to a Census Bureau report. Analysts expected housing starts to fall to 675,000 units. Building permits fell 0.1% to 679,000 from a revised 680,000 in the previous month.

Vote: Where will oil prices finish in 2012?


The Federal Reserve Bank of Philadelphia also added to promising economic news by reporting that manufacturing in the region expanded at a faster pace this month as employment increased. The regional Fed bank's economic index increased to 7.3 from 6.8 last month, although it missed expectations for a reading of 10, according to Thomson Reuters.

In Europe, France inspired investor confidence after successfully auctioning off 7.965 billion euros of bills. The country held its first longer-term bond auction since the credit rating downgrade by Standard & Poor's last Friday. The rating agency's announcement seemed to have little effect on French bond values as yields fell Thursday. Spain also successfully sold longer-term notes at its first auctions since S&P's downgrade. Spanish yields fell by1.572% on 10-year notes, while inching higher on bonds maturing in 2016.

Germany's DAX closed 0.9% higher while London's FTSE was up 0.5%. Japan's Nikkei Average settled 1% higher and Hong Kong's Hang Seng climbed 1.3%.


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In corporate news, Eastman Kodak , the 131-year-old photo film maker, filed for Chapter 11 bankruptcy protection. The Rochester, New York-based company said it obtained a $950 million, 18-month credit facility from Citigroup to keep it in business. Shares tumbled 35% to 36 cents a share.

eBay , the online auctioneer, topped analysts' quarterly earnings estimates late Wednesday. During the quarter, the online giant earned 60 cents a share on revenue of $3.4 billion. Wall Street was calling for a profit of 57 cents on revenue of $3.32 billion. eBay shares rose 3.9% to $31.51.

F5 Networks reported that fiscal first quarter earnings exceeded analysts' estimates at $1.03 a share. The software maker also forecast that stronger results next quarter, seeing earnings of between $1.05 and $1.07 a share. The stock was surging 10.6% to $120.

Nike announced the launch of its newest digital device for tracking fitness Thursday. The athletic-goods company unveiled the Nike+ FuelBand, which will be available for preorder at a suggested retail price of $149 Thursday, to track all movements, including running, dancing or swimming, and to set personal goals. Nike shares rose 0.7% to $101.58.

Southwest Airlines proved not all airlines are struggling Thursday morning when the Dallas-based carrier reported that net income rose 16% in the fourth quarter. The airline said earnings rose to 20 cents a share from 18 cents a year earlier as it sees passenger revenue remaining strong. However, adjusted earnings fell to 9 cents a share from 15 cents, beating the average estimate of analysts surveyed by Thomson Reuters by 1 cent. Shares were up 3.1% to $9.30.

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March oil futures fell 19 cents to $100.57 a barrel after the American Petroleum Institute reported late Wednesday that U.S. crude oil inventories unexpectedly dropped last week. February gold futures fell $5.40 to 1654.50 an ounce.

The dollar index was dropping 0.4%. The benchmark 10-year Treasury was falling 23/32, increasing the yield to 1.979%.

-- Written by Chao Deng and Kaitlyn Kiernan in New York.

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