(Updates to close)
By Kristina Cooke
NEW YORK, April 18 (Reuters) - U.S. stocks surged on Friday
as Internet leader Google and heavy equipment maker Caterpillar
showed resilience in the face of a slowing economy with profits
that defied Wall Street's modest expectations.
Citigroup also fueled a rally that pushed the Dow to its
best week since February as investors took comfort that the No.
1 U.S. bank is taking aggressive steps to resolve credit
problems that led to its latest quarterly loss, fueling hopes
that the credit crisis is near an end.
All three major indexes ended the week up more than 4
percent.
The week was highlighted by a strong showing from
Caterpillar, Google and other companies that generate a large
part of their profits overseas. The results helped investors
overcome persistent fears about the impact of a devastating
credit crisis on business and consumer spending.
Shares of Caterpillar, a manufacturing bellwether, rose
more than 8 percent after the company reported
stronger-than-expected profits.
In technology, Google shares rose 20 percent to $539.41 on
the Nasdaq after the company posted results that quashed fears
of a slowdown in online advertising as it said it saw no impact
from the weakening U.S. economy.
"What we're seeing in the market today is really a
microcosm of what we've seen all week," said Subodh Kumar,
chief investment strategist, Subodh Kumar & Associates in
Toronto. "The market is prepared to reward companies that are
showing strong earnings."
The Dow Jones industrial average <> jumped 228.87
points, or 1.81 percent, to end at 12,849.36, while the
Standard & Poor's 500 Index <.SPX> rose 24.77 points, or 1.81
percent, to 1,390.33. The Nasdaq Composite Index <> soared
61.14 points, or 2.61 percent, to 2,402.97.
For the week, the Dow and the S&P 500 each ended up 4.3
percent, while Nasdaq added 4.9 percent.
Large multinational companies benefited from the weak
dollar either through the conversion of overseas profits into
greenbacks or because they are more competitive against foreign
rivals.
Robust international sales also boosted the earnings of
manufacturer Honeywell International <HON.N>, whose shares rose
6.2 percent to $60.99. Caterpillar's shares rose 8.5 percent to
$85.28.
Google's solid quarterly results, the first time that its
international revenue outstripped U.S. revenue, also lifted
other Internet-based shares.
Analysts at six brokerages, including Merrill Lynch and
Oppenheimer, raised their share price targets on Google.
Other Internet-based shares trading higher included Chinese
search engine Baidu.com <BIDU.O>, up 10.1 percent to $341, and
online retailer Amazon.com <AMZN.O>, up 8.2 percent to $80.10.
Financial shares also had a strong day, with an index of S&P
financial companies <.GSPF> gaining 1.8 percent, helped by
Citigroup, which rose 4.5 percent to $25.11.
Citi posted a $5.11 billion quarterly loss and said it will
cut another 9,000 jobs after suffering billions of dollars of
write-downs tied to mortgages, other debt and a slumping
economy. But investors welcomed its efforts to drive down
expenses and restore luster to a stock that has fallen by about
half over the last year.
Trading was moderate on the New York Stock Exchange, with
about 1.48 billion shares changing hands, falling short of last
year's estimated daily average of roughly 1.9 billion. On
Nasdaq about 2.19 billion shares traded, above last year's
daily average of 2.17 billion.
Advancing stocks outnumbered declining stocks by a ratio of
about 3 to 1 on the NYSE and Nasdaq.
(Additional reporting by Caroline Valetkevitch, Editing by
Leslie Adler
