US stocks rise on earnings despite weak jobs report

NEW YORK (AFP) - US stocks rose on Tuesday on generally solid corporate earnings and increased confidence after a weaker-than-expected jobs report suggested the US Federal Reserve will not soon scale back its stimulus programme.

The Dow Jones Industrial Average rose 75.46 points (0.49 per cent) to 15,467.66. The broad-based S&P 500 tacked on 10.01 (0.57 per cent) at 1,754.67 while the tech-rich Nasdaq Composite increased 9.52 (0.24 per cent) to 3,929.57.

The gains followed a trove of corporate earnings from companies like Dow component DuPont and consumer products company Kimberly-Clark, both of which bested expectations.

Analysts at Wells Fargo Advisors said that with roughly 100 members of the S&P 500 having reported earnings thus far, early results are "rather encouraging." Michael James, managing director of equity trading at Wedbush Securities, said investors were also reacting to the September US jobs report, which showed growth of 148,000 jobs, well below expectations. The disappointing results appeared to weaken the chances the Fed will quickly scale back its US$85 billion-(S$105 billion-)per-month bond-buying programme.

"A weaker jobs report is why there is further belief that tapering is not going to be happening anytime soon," James said.

James said investors were rotating cash out of some tech names such as Netflix, down 9.2 per cent after its stock soared following Monday's estimate-beating quarterly results, and into industrial companies, such as FedEx (up 1.8 per cent).

Tech giant Apple dipped 0.3 per cent after unveiling a pair of new tablets, including the "iPad Air," touted for its lighter weight.

Drilling company Transocean shot up 6.0 per cent after the organisers of the S&P 500 announced the company would join the index on Oct 28, replacing computer company Dell, which is being taken private.

Delta Air Lines tacked on 3.2 per cent after earnings of US$1.41 per share bested expectations by five cents. The company gave an upbeat assessment of market conditions, pointing to "strong holiday bookings" through the end of the year.

Other companies that gained after earnings reports included Kimberly-Clark (up 4.2 per cent) and mining giant Freeport-McMoRan Copper & Gold (up 3.8 per cent).

Handbag and accessory maker Coach fell 7.5 per cent after revenues came in slightly below expectations at US$1.15 billion. The company said North American sales fell 1 per cent.

Other companies to see declines after earnings were Dow component United Technologies (down 1.2 per cent) and EMC (down 4.8 per cent).

Bond prices jumped. The 10-year Treasury fell to 2.51 per cent from 2.62 per cent on Monday, while the 30-year declined to 3.61 per cent from 3.68 per cent.

Bond prices and yields move inversely.