While you were sleeping: Intel shares jump on outlook
July 17 (BusinessDesk) - Wall Street rose, lifting the Dow to a fresh record, after Intel posted better-than-expected earnings and Rupert Murdoch’s 21st Century Fox made an unsolicited bid to buy Time Warner.
In late afternoon trading in New York, the Dow Jones Industrial Average climbed 0.42 percent, the Standard & Poor’s 500 index added 0.43 percent, while the Nasdaq Composite Index gained 0.45 percent.
Shares of Intel jumped 7.8 percent while those of Microsoft gained 3.3 percent, propelling the Dow higher. IBM increased 2.3 percent while Cisco rose 1.3 percent. IBM and Apple put aside decades of animosity by agreeing to work together to bolster their respective appeal to corporate clients.
Earlier in the day, the Dow set an intraday record of 17,138.81.
"Our second-quarter results showed the strength of our strategy to extend the reach of Intel technology from the data center to PCs to the Internet of Things," said Intel CEO Brian Krzanich in a statement.
Analysts agreed that the company’s outlook has improved. At least 19 brokerages raised their price targets on Intel’s stock to US$29-US$45, while two brokerages raised their ratings to an equivalent of "buy", Reuters reported.
Also soaring were shares of Time Warner, last up 16.8 percent, after the company rejected a near US$80 billion stock and cash takeover bid from 21st Century Fox.
“The board is confident that continuing to execute its strategic plan will create significantly more value for the company and its stockholders and is superior to any proposal that Twenty-First Century Fox is in a position to offer,” Time Warner said in a statement.
The latest economic data brought further evidence of strength in the world’s largest economy. US industrial production rose 0.2 percent in June, while a separate report showed the producer price index increased 0.4 percent last month.
"The backdrop for the manufacturing sector is favourable at the start of the third quarter,"Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina, told Reuters.
All 12 Federal Reserve districts indicated that economic activity continued to expand since the previous report, the Fed said in its Beige Book business survey.
“Overall consumer spending increased in every district,” according to the Fed. “Manufacturing activity expanded in all twelve districts.”
In Europe, the Stoxx 600 Index advanced 1.3 percent from the previous close. The UK’s FTSE 100 Index rose 1.1 percent, Germany’s DAX increased 1.4 percent, while France’s CAC 40 climbed 1.5 percent.
The world’s second-largest economy also offered signs of a pick-up. A report showed that China’s gross domestic product rose 7.5 percent in the second quarter from a year earlier, up from 7.4 percent in the previous quarter. It was slightly better than the 7.4 percent rate expected by economists.