UNITED States stocks posted the first back-to-back weekly gains since February after earnings at Boeing Co and Philip Morris International Inc bolstered speculation overseas growth will offset slower domestic demand.
Boeing, the world's second-biggest maker of jetliners, rose the most in the Dow Jones Industrial Average. Philip Morris International, the cigarette maker spun off from Altria Group Inc last month, topped profit estimates by 15 percent. Among 263 companies in the Standard & Poor's 500 Index that have reported first-quarter results, 73 percent beat or matched the average estimate of analysts surveyed by Bloomberg News.
"The market was too pessimistic," said Mark Freeman, asset manager at Westwood Holdings Group in Dallas, which manages US$8 billion.
Beyond financial institutions and firms reliant on discretionary spending by consumers, "you still see companies executing, doing well, coming in better than expectations."
The S&P 500 rose 0.5 percent to a three-month high of 1,397.84 last week, paring its 2008 decline to 4.8 percent. The Dow average added 0.3 percent to 12,891.86.
Boeing jumped 7.9 percent to US$84.84, its biggest weekly advance since August 2003. First-quarter profit surpassed analysts' estimates by 19 percent, according to Bloomberg data, boosted by the euro's gain against the US dollar and demand from airlines for newer, more fuel-efficient planes.
Philip Morris posted a 29-percent jump in profit as new varieties of Marlboro cigarettes and acquisitions spurred sales in Indonesia, Pakistan and Mexico. The world's largest tobacco firm outside of China said profit this year will exceed its forecasts. Its shares rose 2.7 percent to US$51.30.
Liberty buys Safeco
Safeco Corp, which agreed to a US$6.2-billion takeover by Liberty Mutual Group Inc, surged 42 percent to US$66.10 for the biggest advance in the S&P 500. The combination will create the fifth-largest US property and casualty insurer.
Broadcom Corp had the second-largest gain in the S&P 500, jumping 21 percent to US$27.99. The maker of chips for Nintendo Co's Wii video-game console reported more earnings than analysts estimated, helped by higher demand from telephone-equipment companies.
The market's gain was limited after 3M Co and DuPont Co said the US economic slowdown may hurt profits, National City Corp sold a stake at a 40-percent discount to replenish capital, and Ambac Financial Group Inc took US$3.1 billion in charges for subprime-related stocks.
Earnings outside the financial industry have added 11 percent for firms in the S&P 500. Including banks, brokerages and other financials, profits have fallen 19 percent.