COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

Stocks rise as earnings reports overshadow Europe concerns

A lack of any major economic news reports kept stock prices in a narrow range Wednesday.

The Dow Jones Industrial Average gained 7.22 points to 13,986.52 and has advanced in three of the last four trading sessions.

The Nasdaq Composite Index trended lower, down 3.10 points to 1,512.12 and the S&P 500 Stock Index fell less than a point to 1,512.12.

The markets did react to corporate earnings reports from companies like Time Warner (NYSE: TWX) and Chipotle Mexican Grill (NYSE: CMG) that came in above expectations.

Oil was little changed on Wednesday, down two cents to $96.62 a barrel. Gold rose, up $5.30 to $1,678.80 a barrel.

GameStop Corp. (NYSE: GME) plunged 6 percent after a report said Microsoft Corp.’s (Nasdaq: MSFT) next Xbox console will require an Internet connection.

DreamWorks Animation SKG Inc. (Nasdaq: DWA) dropped 3.9 percent after the company pulled one movie from its schedule and delayed the release of another.

“Most of the bad news is well-known and the better news is still playing,” David Sowerby, fund manager at Boston-based Loomis Sayles & Co., said in a telephone interview.

His firm oversees about $180 billion. “In a tug-of-war with Europe, the good news, which is earnings, respectable valuations, and continued low interest rates, is winning the war.”

Visa Inc. (NYSE: V), News Corp. (NWS) and Prudential Financial Inc. (NYSE: PRU) are among 24 companies in the S&P 500 reporting earnings Wednesday.

About 74 percent of the 303 index members that have released results so far in the earnings season exceeded profit projections, and 67 percent beat sales estimates, data compiled by Bloomberg show.

Time Warner Inc. (NYSE: TWX), owner of the HBO cable network and the Warner Bros. film studio, rose $2.05 to $52.01. Chief Executive Officer Jeffrey Bewkes has concentrated the company’s growth strategy on its TV business.

He fostered the development of costly shows, such as HBO’s “Game of Thrones,” and signed rights deals for major sports programming, including the NCAA basketball tournament, to command higher fees from pay-TV providers such as Comcast Corp. (Nasdaq: CMCSA) and DirecTV (Nasdaq: DTV).

The N.Y.-based company also announced a new buyback program and boosted its dividend 11 percent to almost 29 cents a share, up from 26 cents.

Walt Disney Co. (NYSE: DIS), the world’s largest entertainment company, advanced 23 cents to $54.52. The owner of the “Star Wars” and “Avengers” franchises said first-quarter profit adjusted for some items was 79 cents a share, topping the 77-cent average of 26 analysts’ estimates compiled by Bloomberg. Sales rose 5.2 percent to $11.3 billion.

3M Co. (NYSE: MMM) jumped 1.2 percent to $102.69, for the biggest advance in the Dow. The maker of products ranging from Scotch tape to dental braces authorized a stock buyback program of as much as $7.5 billion and increased the quarterly dividend by 7.6 percent.

Wynn Resorts Ltd. (Nasdaq: WYNN), which depends on its Macau unit for most of its revenue, dropped 2 percent to $123.30. China’s government will start taking action this month to clamp down on junket operators that bring gamblers from the mainland to Macau, the London-based Times reported on its website, citing unidentified people in law enforcement.

Apple Inc. (Nasdaq: AAPL) fell 0.1 percent to $457.35, erasing an earlier rally of as much as 1.9 percent. A report showed that Legg Mason Inc. (NYSE: LM) fund manager Bill Miller said the stock may be worth 50 percent more than its current price.

Miller told the Financial Times the shares could be worth more if the company were to keep all its cash on its balance sheet and put future free cash flow into a dividend.



Bloomberg News contributed to this report.



Related Links:
New York Stock Exchange: www.nyse.com
Nasdaq Stock Market: www.nasdaq.com

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