US stocks closed a choppy session higher overnight, investors welcomed some better than expected earnings results but remained cautious after Federal Reserve Chairman Ben Bernanke warned that a recovery in the economy would be slow.
Mr Bernanke told a House committee that the pace of economic decline has slowed significantly but that the labour market has worsened, and a recovery would be a gradual process.
The Dow Jones industrial average rose 68 points to 8,916. The S&P500 Index is 3 points higher at 955 and the NASDAQ added 7 points to 1,916. In company news: Shares in Caterpillar Inc (NYSE:CAT) rose 7.67 per cent to $39.46. After the company gave an upbeat outlook, although gains were limited after company executives said the third quarter was likely to be a tough one due to softening demand. According to CNN Money Caterpillar says it is sees signs that the global economy is stabilising and that government stimulus measures globally are starting to take effect.
Shares in diversified manufacturer United Technologies Corporation (NYSE:UTX) fell 1.82 per cent to $53.97. The company reported a 23 per cent fall in earnings and lowered its forecast for 2009. The company’s CFO commented that cost cutting initiatives will lead to profit growth but that the company does not anticipate a significant recovery in the economy in 2010.
Pharmaceutical company Merck & Co Inc (NYSE:MRK) shares gained 6.12 per cent to $29.65. The company posted lower earnings for the second quarter that however, beat forecasts. The company’s result impacted by a decline in sales of its cholesterol drugs but a rebound in sales of asthma drug Singulair.
And shares in office printers and supplies company Lexmark International Inc (NYSE:LXK) plunged 19.66 per cent to $15.08. After the company posted lower than expected earnings results on weaker demand for its printers and supplies. The company also issued an outlook that came in below analyst expectations.
Checking the NASDAQ Top 100: The best performer overnight was Millicom International which advanced 10.16 per cent to $68.01. First Solar and NetApp also closed higher. On the downside, the worst performer was Maxim Integrated which dropped 2.98 per cent to $17.23. Ryanair Holdings and Nvidia also closed weaker.
