UPS Helps Boost Stocks

By PETER A. MCKAY

Strong earnings from United Parcel Service and improved regional readings of manufacturing activity prompted an uptick in the stock market.

After seesawing early in the session, the Dow Jones Industrial Average moved into positive territory for good in mid-afternoon. It ended 21.46 points higher, up 0.2%, at 11144.57. The Nasdaq Composite Index was up 0.4%, helped by a 1.1% rise in Google ahead of the search giant's earnings report, which beat expectations when it was released after the close.

The Dow Jones Transportation Average rose for a sixth straight day, ending 1.7% higher at 4724.93, up 7.5% over its latest winning streak.

UPS climbed 5.3% after the shipping giant said its first-quarter adjusted earnings jumped a better-than-expected 37%. The company improved operating margins across all three segments and noted improvement in its international-package and supply-chain businesses.

The shipper's earnings were the latest of a promising series of earnings reports. The report highlighted some of the same themes that traders latched onto following a strong quarterly release from railroad CSX on Wednesday.

Traders often look at the fortunes of transportation companies as a barometer of demand for goods in the broader economy. That outlook is particularly important at the moment, with a budding recovery apparently underway in the U.S. even as many traders doubt that consumer activity can remain strong through year end.

"There are some storm clouds out there, but I'm not really in the camp that says the market has come so far that it just has to go down," said Bernie McGinn, president of McGinn Investment Management. "We're in a situation where the stores can do well, and the retailers can do well, but they won't do as well as they would have five years ago."

The early going of the first-quarter earnings season has provided mostly pleasant surprises for investors, prompting increased optimism on Wall Street that the market can improve upon its recent 18-month highs.

On Thursday, Bank of America Merrill Lynch strategist David Bianco raised his earnings outlook for 2010, 2011, and 2012, and boosted his target for the S&P this year to 1300 from 1275.

Referring to recent improvements in many companies' revenues, Mr. Bianco wrote: "This boost reflects higher S&P 500 top-line growth with more margin expansion from lower credit costs and more operating levergae than we previously assumed."

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Associated Press
.Thursday's economic releases were mostly positive. The Federal Reserve branches in New York and Philadelphia reported improved manufacturing activity in their respective regions for April. Separately, a new survey by the National Association of Home Builders showed rising confidence among builders regarding the housing market in April. However, the Labor Department said weekly initial jobless claims rose slightly in the week ended April 10, contrary to analysts' expectations for a decline.

The S&P 500 was up 0.1%, led by a 0.9% rise in its industrial sector. But the broad index was held in check by declines in health care, consumer staples, and telecommunications.

Among stocks to watch, Hewlett-Packard fell 0.5% on reports that German and Russian authorities are investigating whether the computer-hardware maker's executives paid millions of dollars in bribes to win a contract in Russia.

Wal-Mart Stores fell 0.9% after the chief executive of its U.K.-based supermarket chain Asda set out plans for a big expansion of its stores, but said the company is cautious about the economic outlook.

Journal Community
..The dollar strengthened against the euro as Greece asked the European Union and the International Monetary Fund to begin "discussions" on aid. Treasury prices rose, pushing the 10-year note up 7/32 to yield 3.838%. Crude-oil futures edged down while gold futures rose.

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