Dow back above 17,000 on higher consumer confidence

Traders work on the floor of the New York Stock Exchange Oct 28, 2014. The Dow jumped back above 17,000 on Tuesday following a strong report on US consumer confidence and another round of mostly solid corporate earnings. -- PHOTO: REUTERS
Traders work on the floor of the New York Stock Exchange Oct 28, 2014. The Dow jumped back above 17,000 on Tuesday following a strong report on US consumer confidence and another round of mostly solid corporate earnings. -- PHOTO: REUTERS

NEW YORK (AFP) - The Dow jumped back above 17,000 on Tuesday following a strong report on US consumer confidence and another round of mostly solid corporate earnings.

The Dow Jones Industrial Average rose 187.81 points (1.12 per cent) to 17,005.75, its first close above 17,000 since Oct 3.

The broad-based S&P 500 gained 23.42 (1.19 per cent) to 1,985.05, while the tech-rich Nasdaq Composite Index soared 78.36 (1.75 per cent) to 4,564.29.

The Conference Board said the consumer confidence index leaped to 94.5 in October from 89.0 in September, a cheery sign for the upcoming holiday shopping season.

Jack Ablin, chief investment officer at BMO Private Bank, said the report offset a "lousy" drop in durable goods orders for September due to a decline in volatile transportation orders.

Michael James, managing director of equity trading at Wedbush Securities, said most earnings have been "very solid."

Pharmaceutical giant Pfizer advanced 0.2 per cent as earnings came in at US$2.7 billion (S$3.4 billion), up 2.9 per cent from the prior year. Stronger sales in vaccines and some other products offset the negative hit from patent expirations on other medications.

Twitter sank 9.8 per cent as it reported a 23 per cent rise in monthly users to 284 million. Analysts said the microblogging site's user trends are discouraging compared with rival Facebook.

Metals producer Freeport-McMoran dropped 4.2 per cent as third-quarter net income fell 32.8 per cent to US$552 million due to lower prices for gold and copper.

Department store chain Kohl's slumped 6.6 per cent after projecting comparable sales will drop 1.4 per cent in the third quarter and that 2014 earnings will be at the low end of its prior estimated range.

IBM advanced 1.1 per cent on news that its board authorised US$5 billion in additional funds for share repurchases.

Biotech company Amgen bolted 6.1 per cent higher as it unveiled plans to implement deeper job cuts, lift shareholder payouts and increase revenues to more than US$20 billion in 2015.

Madison Square Garden jumped 11 per cent following its announcement that it may split itself into separate companies, with one division focusing on entertainment and the other on media and sports.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.28 per cent from 2.26 per cent Monday, while the 30-year advanced to 3.06 per cent from 3.03 per cent. Bond prices and yields move inversely.