Dow Ends Higher After AmEx Surprise

Stocks pulled off a gain — barely — as investors cheered earnings surprises from American Express and others amid an underlying buzz of anxiety about the economy.

This came a day after stocks eked out a gain despite a crushing wave of layoffs that saw more than 70,000 jobs plucked from the economy in just one day.

Investors got some earnings surprises before the bell but they were quickly quashed by a report soon after the open that showed consumer confidence fell to a record low in January.

"Consumers remain quite pessimistic about the state of the economy," Lynn Franco, director of the Conference Board Research Center, said in a statement.

But stocks chugged higher again and financials led the Dow pack: American Express shot up 9.7 percent, Bank of America gained 8.3 percent and Citigroup rose 6.6 percent.

Citigroup had steadily moved higher today but shot up after CEO Vikram Pandit reiterated his plan to slash costs. Speaking at a Citigroup financial-services conference in New York, Pandit said he plans to slash expenses to $32 billion, down 15 percent from last year.

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Investors snapped up shares of American Express after the credit-card maker late Monday beat earnings expectations even as it reported its profit dropped 72 percent.

Analysts had anticipated the worst after dismal results last week from rival Capital One that showed credit-card spending fell 10 percent.

U.S. Steel jumped nearly 7 percent after the steelmaker reported its earnings increased more than eightfold.

Bristol Myers Squibb also surpassed forecasts as strong sales of blockbuster blood thinner Plavix help the drug maker swing to a huge profit. Its shares rose 4 percent.

Texas Instruments shares rose 3.6 percent after the chip maker pleased investors will a smaller-than-expected drop in quarterly profit and said it would slash 12 percent of its workforce.

After dismal earnings from handset makers, analysts expected some gloomy results from wireless-chip makers like TI.

These were the latest in a series of earnings surprises: More than half of the S&P firms that reported earnings have topped expectations.

Of course, there was still plenty of gloom in earnings.

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DuPont posted a larger-than-expected quarterly loss and lowered its 2009 outlook, saying it experienced lower paint sales because of the slump in the auto industry.

Verizon and AT&T shares were the biggest drags on the Dow after Verizon met its earnings target but reported a slowdown in its wireless business.

And Delta Air Lines tumbled 20 percent after the airline reported a $1.4 billion quarterly loss amid merger costs and bad fuel hedges.

General Electric shares gained 5 percent. After the bell, Moody's said it was putting GE on review for a possible downgrade to its credit rating from triple-A. GE is the parent of CNBC.

Among other market buzz: Tim Geithner was confirmed as Treasury secretary in a Senate vote late Monday and vowed to act quickly in the face of the financial crisis. William Dudley will succeed Geithner as the head of the New York Federal Reserve Bank, the NY Fed said Tuesday.

This Week:

TUESDAY: Fed 2-day meeting starts; Earnings from Yahoo and Sun Micro after the bell
WEDNESDAY: Davos Economic Forum begins; Weekly mortgage applications; Weekly crude inventories; Fed decision on interest rates; Earnings from AT&T, Boeing, Novartis, Pfizer, Wells Fargo, Boston Scientific, Qualcomm and Starbucks
THURSDAY: Weekly jobless claims; durable-goods orders; new-home sales; Earnings from Altria, Amazon, Broadcom, Colgate-Palmolive, Ford, Eli Lilly and Wyeth
FRIDAY: Q4 GDP; consumer sentiment; Earnings from Chevron, ExxonMobil, P&G and Honeywell

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