Stocks were up at midday as markets shook off fears of the looming sequester and cheered better-than-expected home-sales data. Federal Reserve chairman Ben Bernanke also offered encouraging comments on the economic benefits of the central bank's current monetary policy.
Earlier Wednesday, the National Association of Realtors reported a 4.5% increase in pending home sales for January, a 9.5% improvement over the same time last year and more than double the expected increase of 2.0%. Although home supply is thin for many regions, January's index reading was the highest in almost three years.
Meanwhile, orders for durable goods declined by 5.2% in January from December's reading, with spending on defense goods plummeting from large increases in December, on account of fiscal cliff fears. Aircraft demand fell sharply, as well, but overall spending did not fall by as much as expected.
Stocks on the Move
Target (TGT) posted a slight drop in fourth-quarter earnings resulting from higher expenses, but revenue beat Wall Street expectations. The retailer's current-quarter and adjusted full-year earnings-per-share forecast are also both ahead of Street expectations. Shares however were 1.5% lower at midday.
Dollar Tree Stores (DLTR) shares surged by more than 12%, after the firm reported a 22% year-over-year gain in fourth-quarter earnings, with EPS and revenue coming in at the high end of the firm's forecast. That said, Dollar Tree's full-year EPS forecast is below that of Wall Street.
Edison International (EIX) saw its shares spike at open only to fall soon after, though they were still 2.1% higher at midday. After impairing and deconsolidating earnings from Edison Mission Energy as of its bankruptcy filing Dec. 17, 2012, the firm reported $3.92 core EPS for the full-year 2012. Full-year results exceeded Morningstar analyst expectations primarily due to $0.68 per share of tax benefits
Strong U.S. market performance early Wednesday allowed European stocks to gain late in their respective sessions. The FTSE 100 rose by 0.9%, the DAX gained 1.0%, and the Paris CAC was 1.9% higher.
Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.