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Tuesday, 17 July, 2001, 21:40 GMT 22:40 UK
New optimism for US investors
Traders at the New York Stock Exchange
Traders are all set for a tense day
There was a mixed picture for investors at the end of one of the busiest days of the year on Wall Street.

And optimists outweighed pessimists on the markets, with US stocks reversing early declines to end the day on a high note.

A host of the largest US firms announced their latest profits figures - providing clues as to whether or not businesses are beginning to turn the corner.

Q2 year-on-year results
up 30%
up 16%
Merrill Lynch
down 41%
Charles Schwab
down 51%
down 76%
down 70%
Some good news emerged before the US markets opened from two of the biggest drugs firms, Pfizer and Johnson & Johnson, but there were poor sets of figures from financial sector heavyweights Merrill Lynch and Charles Schwab, and General Motors.

The blue-chip Dow Jones Industrial Average surged 134 points to 10,606 while the Nasdaq rose 38 points to 2,067.

After the markets closed, Intel and Apple both reported results that are expected to guide technology indexes around the world when trading resumes.

Meeting expectations

With many US companies already having warned on profits at least once, the most important information for investors to digest on Tuesday was whether the results were in line with expectations.

And what the company said about the outlook for the rest of the year also gave investors some insight into the length and the severity of the US slowdown.

It also provided some clue as to whether any pick up was due in New York stock markets.

From the beginning of the year to the close of business on Monday, New York's Dow Jones Industrial Average had fallen by 3%, the technology-heavy Nasdaq had tumbled 18%, while the UK's leading index of shares has dropped by 11%.

Financial battering

Drugs firms, Pfizer and Johnson & Johnson, gave a bright start to the day with both companies reporting a rise in profits in the second quarter as they proved that the drugs industry was one of the least likely to be affected by global economic turmoil.

But the financial sector took a battering when investment bank Merrill Lynch reported a 41% drop in second quarter profits, while net income at America's leading online brokerage Charles Schwab slid by 51%.

The impact of the US slowdown also hit the world's largest car maker General Motors, where dwindling sales led profits to crash 74% lower.

And adding to the gloom, American industry had to absorb the news that manufacturing activity fell in June for the ninth month in a row.

The Federal Reserve reported that industrial production at the nation's factories, mines and utilities declined by 0.7% last month, following a 0.5% drop in May.

After the end of business, the world's largest chipmaker, Intel, reported a 76% slump in sales but beat analyst expectations nevertheless.

And personal computer maker Apple reported in line with expectations but worried investors by saying that it did not expect sales to pick up later this year.

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See also:

17 Jul 01 | Business
Drugs firms beat the slowdown
17 Jul 01 | Business
General Motors profits drop 74%
03 Apr 01 | Business
Shares fall worldwide
17 Jul 01 | Business
Intel profits slump 76%
17 Jul 01 | Business
Apple warns of trouble ahead
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