Stocks point higher as companies show profits

[January 27, 2009]  NEW YORK (AP) -- Wall Street showed some relief Tuesday that big companies like American Express Co. and Texas Instruments Inc. managed to post profits in a difficult recession.

Stock futures signaled a higher open following the companies' reports late Monday and ahead of a reading on consumer confidence. The market also awaited the start of the Federal Reserve's two-day meeting on interest rates.

Investors prepared for another steady stream of corporate earnings reports in a range of industries. Reports are due from Verizon Communications Inc. and AK Steel Holding Corp.

DuPont Co. said early Tuesday it swung to a fourth-quarter loss, hurt by a hefty restructuring charge. The chemicals maker reported a loss of $629 million compared with profit of $545 million a year earlier.

But not all companies turned in losses, a welcome reminder for investors that some companies are still managing to make money despite the worst recession in decades. American Express reported profits fell 79 percent in the final three months of 2008. The numbers weren't as weak as some investors had feared.

Likewise, Texas Instruments said its earnings fell 86 percent and that it would slash 3,400 jobs as the maker of chips for cell phones and other products tries to cut costs.

Dow Jones industrial average futures rose 62, or 0.77 percent, to 8,099. Standard & Poor's 500 index futures rose 6.60, or 0.79 percent, to 837.40, while Nasdaq 100 index futures rose 2.50, or 0.21 percent, to 1,182.00.

Beyond earnings, Wall Street expects a preliminary report on consumer sentiment in January to show that Americans remain the most pessimistic in at least 30 years as they contend with rising layoffs, falling home prices and declining investment accounts. The reading from The Conference Board, a private New York-based research group, is expected to come in at 39 for January, up from 38 in December, according to economists surveyed by Thomson Reuters.

The levels are the lowest since the group began compiling the index in 1967. In January last year, the confidence index was 87.3.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.63 percent from 2.65 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.15 percent from 0.13 percent Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose 88 cents to $46.61 in premarket electronic trading on New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average jumped 4.93 percent. In afternoon trading, Britain's FTSE 100 fell 1.24 percent, Germany's DAX index fell 0.66 percent, and France's CAC-40 fell 1.18 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By TIM PARADIS]

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