With no economic news on the table, and following two days of heavy losses, investors came out in a buying mood today. The broad-based S&P 500 (^GSPC 0.96%) reversed its two-day loss streak, and finished decisively higher by 13.18 points (0.88%), to close at 1,515.60, thanks, in large part, to better-than-expected earnings results.
One of the biggest surprises driving the market higher was Dow Jones component Hewlett-Packard (HPQ -0.83%) which, at a 12.3% gain, was the best performer within the S&P 500. HP shares rose after the PC maker topped Wall Street's first-quarter earnings estimates, and following an upgrade to "neutral" from "sell" at UBS, as well as multiple other price target hikes from other brokerage firms. For the quarter, revenue fell 5.6%, to $28.4 billion, and adjusted profit came in at $0.82. Both figures compared favorably to the $27.8 billion and $0.71 expected by Wall Street. Furthermore, HP's second-quarter EPS forecast of $0.80-$0.82 is higher than the current $0.77 consensus. Before you get too excited, keep in mind that HP is still in the early stages of its turnaround, and further hiccups are to be expected.
Oil and natural gas exploration and production company Cabot Oil & Gas (CTRA -0.89%) also soared 11.1%, after reporting better-than-expected fourth-quarter results. For the quarter, revenue for the natural gas heavy company vaulted 38% higher despite a 3% drop in realized natural gas prices, due to a huge 44% increase in production. Net income advanced to $0.19, from $0.13 in the year-ago period. Looking ahead, Cabot outlined capital expenditures of around $1 billion, with production growth of 35% to 50%. With natural gas set to become such a large component of President Obama's energy independence initiatives, Cabot looks well positioned to take advantage of natural gas prices should they rise considerably.
Finally, semiconductor manufacturer Texas Instruments (TXN 1.61%) shot higher by 5.2% after it announced that it was boosting its quarterly payout by 33%, to $0.28, from $0.21, and that it was adding $5 billion to its already existing share repurchase program. This marks the tenth straight year that Texas Instruments has raised its dividend, and brings its total share repurchase program up to $8.4 billion. The new yield of 3.3% yet again places Texas Instruments among tech's most coveted income-producing stocks, and gives investors yet another reason to own an already phenomenal growth story.
