Stocks rise modestly in early trading after fresh round of upbeat earnings, economic reports

Stocks rise on upbeat earnings, economic reports

NEW YORK — The stock market extended its advance Wednesay after Deere & Co.’s earnings beat expectations and the government issued an upbeat housing report.

The day’s news again raised expectations that the economy is strengthening. On Tuesday, an improved manufacturing report helped send the Dow Jones industrial average up 170 points. The Dow tacked on another 25 points in afternoon trading Wednesday.

The Commerce Department said construction of homes and apartments rose to an annual rate of 591,000 in January, better than the 580,000 units forecast by economists polled by Thomson Reuters.

A collapse of the housing market helped push the economy into recession, but recent reports have suggested the market is stabilizing. Applications for building permits, a barometer of future activity, fell 4.9 percent to a rate of 621,000. A drop was expected after two months of big growth.

The Federal Reserve, meanwhile, said production at the nation’s factories, mines and utilities rose 0.9 percent last month. It was the seventh straight month of growth and better than the 0.6 percent gain forecast by economists.

Stocks had fallen in recent weeks on overseas concerns, including Greece’s debt crisis and moves by China to slow its economy. Those concerns appear to have eased, allowing investors to again focus on the domestic economy.

But Ken Kamen, president of Mercadien Asset Management in Hamilton, N.J., said there is still an underlying sense of unease in the market despite the gains of the past two days.

“From day to day there’s no one boogeyman or no one exciting thing,” Kamen said. “People age getting neck strain spinning their head from side to side looking at all the different pieces of information.”

In early afternoon trading, the Dow rose 25.39, or 0.3 percent, to 10,294.20. The Standard & Poor’s 500 index rose 2.85, or 0.3 percent, to 1,097.72, while the Nasdaq composite index rose 5.29, or 0.2 percent, to 2,219.48.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.70 percent from 3.66 percent late Tuesday.

The dollar rose against most other major currencies. Gold prices fell.

Crude oil rose 13 cents to $77.14 per barrel on the New York Mercantile Exchange.

Deere continued a run of strong earnings reports this week. The heavy equipment maker reported a much better than expected fiscal first-quarter profit, and raised its full-year earnings forecast. The stock jumped $2.47, or 4.6 percent, to $56.25.

Meanwhile, Walgreen Co. said it will purchase New York-area drugstore operator Duane Reade for about $623 million in cash. Including $457 million in debt held by Duane Reade, the entire transaction is valued at $1.08 billion. Shares of Walgreen rose 8 cents to $34.16.

Stocks rose sharply Tuesday after better-than-expected earnings from companies like Barclays PLC, Merck & Co. and Abercrombie & Fitch provided reassurances that the economy is improving. Simon Property Group’s takeover bid of rival mall operator General Growth Properties also indicated companies are becoming more confident.

The Dow soared nearly 170 points, or 1.7 percent, on Tuesday. The S&P 500 index rose 1.8 percent, while the Nasdaq jumped 1.4 percent.

Among companies reporting earnings, Whole Foods Market Inc. rose $3.50, or 11.5 percent, to $34.02 after the grocer posted a 79 percent gain in its first-quarter earnings and it boosted its forecast for the year.

Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 503.9 million shares compared with 465 million shares traded at the same point Tuesday.

The Russell 2000 index of smaller companies rose 1.35, or 0.2 percent, to 622.19.

Britain’s FTSE 100 rose 0.6 percent, Germany’s DAX index rose 1 percent, and France’s CAC-40 jumped 1.5 percent. Japan’s Nikkei stock average rose 2.7 percent.