U.S. Stocks Advance on Earnings; Citigroup, Google Shares Climb

U.S. stocks rose for a fourth day, poised for the best week since February, after companies from Citigroup Inc. to Google Inc. to Caterpillar Inc. reported results that exceeded analysts' estimates.

The market, battered last week by General Electric Co.'s disappointing results, rallied today after Citigroup's loss was less than the most pessimistic projections and profits at Google and Caterpillar were boosted by overseas growth. Honeywell International Inc. and Xerox Corp. also climbed on better-than- forecast results. All 10 industry groups in the Standard & Poor's 500 Index rose, extending its weekly gain to 4.3 percent.

The panic is overdone, and before you know it things are going to be just fine, said Michael Williams, who helps oversee about $2.8 billion as managing director of Genesis Asset Management in New York. The world's ticking along just fine.

The S&P 500 added 28.85, or 2.1 percent, to 1,394.41 at 12:45 p.m. in New York. The Dow Jones Industrial Average rallied 262.09, or 2.1 percent, to 12,882.58. The Nasdaq Composite Index increased 68.32, or 2.9 percent, to 2,410.15. Six stocks rose for each that fell on the New York Stock Exchange. European shares advanced, while Asia's benchmark index retreated.

Profits exceeded analyst estimates at 58 of the 100 companies in the S&P 500 that have released first-quarter results so far, even as earnings fell an average 37 percent from a year earlier, according to Bloomberg data. Overall, earnings are forecast to decline 12.3 percent in the first quarter, marking the third straight decrease.

S&P 500 Rebound

While the S&P 500 has rebounded 9.5 percent from a 19-month low on March 10, the benchmark for American equities is still down 5 percent in 2008. Companies in the index trade for an average 14.8 times estimated profits, the cheapest in 18 years when prices are compared with historical earnings.

Citigroup increased $1.77, or 7.4 percent, to $25.80. The bank said revenue fell 48 percent to $13.2 billion, topping the average estimate of $11.1 billion from analysts surveyed by Bloomberg. The first-quarter net loss of $1.02 a share compared with the $1.66 loss predicted by Merrill Lynch & Co.'s Guy Moszkowksi, Institutional Investor's top-rated brokerage analyst.

A lot of people were worried that we'd have a big negative surprise, Edgar Peters, chief investment officer at PanAgora Asset Management in Boston, which oversees $25 billion, said in a Bloomberg Television interview. When we didn't have a big negative surprise, that was a positive surprise.

Google, Caterpillar

Google rallied $94.04, or 21 percent, to $543.58, the most since its August 2004 initial public offering and the biggest gain in the S&P 500. The owner of the most popular Internet search engine said sales rose 46 percent as more users clicked on text advertisements. Overseas sales, accounting for 51 percent of revenue, increased 55 percent.

Caterpillar Inc. rose $6.20 to $84.79 for the biggest gain in the Dow average. First-quarter earnings rose 13 percent, topping analysts' estimates, as sales to China and India increased. Caterpillar in 2007 garnered 62 percent of revenue outside the U.S, according to Bloomberg data.

The dollar has fallen 5.8 percent against a basket of six major currencies this year following an 8.3 percent decline last year, making U.S. products cheaper overseas and increasing the dollar value of sales denominated in those currencies. Coca-Cola Co. and International Business Machines Corp. this week reported profits enhanced by the dollar's drop.

Dollar Advantage

Companies in the S&P 500 garnered 44 percent of their sales from outside the U.S. in 2006 and an estimated 47 percent to 48 percent in 2007, according to Standard & Poor's. The U.S. currency weakened to a record low of almost $1.60 per euro yesterday.

Honeywell International Inc. climbed $3.56 to $60.96. The world's largest maker of cockpit displays said first-quarter earnings rose 22 percent, more than analysts estimated, on sales of aircraft and building controls. Record oil prices led to more sales of refining equipment produced by Honeywell's specialty- materials division. The company, whose overseas sales accounted for 39 percent of revenue last year, said annual profit will be at the high end of the range it predicted in December.

Schlumberger Ltd., the world's biggest oilfield contractor, added $6.02 to $101.32. The company said first-quarter profit rose 13 percent as record oil prices prompted increased drilling by customers worldwide.

Xerox Corp. rose 39 cents to $14.89. The world's largest maker of high-speed color printers said first-quarter revenue rose 13 percent, more than analysts estimated. Chief Executive Officer Anne Mulcahy said the company is seeing steady improvement in markets including Russia, East Europe and India. It faces a challenging market in the U.S. where some companies are now delaying decisions on larger equipment purchases, she said.

E*Trade Financial Corp. rose 34 cents to $3.96. The online brokerage that posted a first-quarter loss of $91.2 million said it expects to return to profitability this year.

Newmont Mining Corp., the world's second-largest gold producer by volume, slid $1.27, or 2.7 percent, to $46.25 for the biggest drop in the S&P 500. Gold futures tumbled 2.8 percent to $916.60 an ounce.