Europe's optimism about a Eurozone debt solution has carried over into another session on Wall Street, with US markets up once again following last night's sharp upturn.
Technology shares lagged however following Apple's rare earnings miss.
By 3.45pm (London time), the Dow Jones was up 0.3% at 11,613.49, and the S&P 500 had risen 0.2% to 1227.89. In London, the FTSE 100 gained 0.72% to 5449.40.
Morgan Stanley reports earnings
The US bank earnings season grinds on, and today it was Morgan Stanley's turn to reveal just how much money it made from a fall in the value of its own debt. The bank made $2.2 billion in the third quarter, or $1.15 per share.
However, the now infamous 'debt valuation adjustment' (DVA) accounted for $1.12 of this, thus earnings were just 3 cents per share once the DVA is removed. This is still better than last year, when Morgan Stanley endured a loss of 7 cents per share.
Figures on the bank's exposure to Eurozone debt helped calm fears about the impact of the debt crisis, and the share price rose 2.65% to $17.07.
But Apple falls short
Iconic tech firm Apple provided a rude shock to spread betting markets last night when it did the previously unthinkable - it failed to meet estimates. The company made $6.62 billion in third-quarter profit, but this fell short of expectations of $7.25 billion, as iPhone sales proved to be disappointing.
The sale of over 17 million iPhones was not as high as the 19 million expected. However, the new iPad did better than expected, with 11.12 million units sold.
Despite a fairly optimistic outlook, Apple shares dropped in after-hours trading, and were down 5% today at $400.20.
US price inflation eases, but housing remains lacklustre
Federal Reserve officials will be smiling this afternoon, after data showed that US consumer prices grew at their slowest pace in three months during September. US CPI rose 0.3%, in line with expectations, while core CPI was up only 0.1% versus an expected 0.2%, the smallest gain since March.
The data corroborates yesterday's PPI in showing that US companies are absorbing price increases rather than passing them on to the beleaguered American consumer.
Meanwhile, work has begun on more homes than forecast last month, with the numbers boosted by an increase in work on apartments as more Americans switch from owning to renting.
Housing starts reached an annual rate of 658,000, an increase of 15%, which was the largest increase since April 2010. However, building permits failed to meet expectations, dropping to a five-month low of 594,000. Since building permits are an indicator of future construction, the figure strikes a worrying note.
BSkyB sees profits rise
The UK consumer might be feeling the squeeze from higher food and energy prices, but this has not deterred them from paying their Sky TV subscriptions. Quarterly operating profit at BSkyB rose 16% to £295 million, while the company added 77,000 new customers to its list.
Sky noted that there was increasing pressure on its customer base and said that it expected the near future to be quite challenging. Its shares rose 4.37% to 705p.
Still some fizz in Diageo
Drinks group Diageo rose 3.5% to 1325p after the company reported 9% sales growth for the three months to 30 September. Although some of this is attributable to one-off effects, such as a particularly poor performance in the US last year, the growth in emerging markets was encouraging.
Net debt increased significantly, from £6.45 billion to £8.36 billion, mainly as a result of its Turkish acquisition.
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'Apple Shocks Spread Betting Market as Earnings Miss Expecations', Article by IG Index, last update: 19-Oct-11
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