Stocks Rise on Earnings Optimism

U.S. stocks trended higher on Tuesday after European markets rallied earlier in the day, as investors anticipate a solid fourth-quarter earnings season.
Stocks Rise on Earnings Optimism
Hostess products are viewed on the shelf at a grocery store on Jan. 10 in New York City. Hostess Brands Inc., the owner of such iconic brands as Twinkies and Wonder Bread, is preparing to file for Chapter 11 bankruptcy protection as soon as this week. The privately held Irving, Texas, company currently employs roughly 19,000 people and carries more than $860 million in debt. The company has been experiencing high labor costs and rising prices for sugar, flour, and other ingredients. Spencer Platt/Getty Images
Updated:
<a><img class="size-medium wp-image-1793854" title="Hostess, Maker Of Wonder Bread And Twinkies, Enters Bankruptcy" src="https://www.theepochtimes.com/assets/uploads/2015/09/hostess_136683384.jpg" alt="" width="350" height="262"/></a>

NEW YORK—U.S. stocks trended higher on Tuesday after European markets rallied earlier in the day, as investors anticipate a solid fourth-quarter earnings season.

The Dow Jones Industrial Average gained 69 points, or 0.6 percent. The broader S&P 500 Index increased 11 points, or 0.9 percent. The Nasdaq Composite Index finished higher by 26 points, or 1 percent.

Pittsburgh-based aluminum producer Alcoa Inc. unofficially kicked off earnings season Monday night with results in line with analysts’ expectations and revenues far exceeding them. In addition, Alcoa predicted a growth in demand for 2012, signaling more business expansion.

Shares in Europe shot up Tuesday as credit ratings agency Fitch Ratings said that it would maintain France’s long-term credit rating. A downgrade to the EU’s second biggest economy would have destabilized the region’s debt markets. After the news, main indices in London, Frankfurt, and Paris were in positive territory. The euro currency also rose for a second day in a row.

Crude oil prices also gained on economic optimism in the United States, although a political standoff with Iran has also helped drive up oil prices. Brent crude for February delivery closed 83 cents higher to $113.28 per barrel, while Texas crude gained 93 cents to settle at $102.24 per barrel on Tuesday.

Foodmaker Could File Bankruptcy

Hostess Brands Inc., a major national bakery company, could file for Chapter 11 bankruptcy protection this week, according to a report in the Wall Street Journal citing insider sources.

Hostess makes the popular Wonder Bread brand of breads and Twinkies snacks. The Irving, Texas-based Hostess has obtained a $75 million debtor-in-possession loan for operations during bankruptcy proceedings.

Kodak Restructures

Imaging giant Eastman Kodak Co. announced another business restructuring on Tuesday following reports that it may also file for bankruptcy this week. Kodak’s shares jumped 45 percent following the news.

The company will create a new division focused on digital consumer goods, and simplify three business lines into two in a move, which Kodak said would streamline operations and cut costs.

The restructure is designed to accelerate the company’s transformation into a digital age leader. “This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak,” said Chief Executive Officer Antonio Perez in a statement.

The 132-year-old company invented digital photography however was late to capitalize on the technology. It has not reported an annual profit since 2007.

 

Related Topics