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Boeing & Amazon Earn Praise

Good profit reports help Wall Street rebound from Tuesday's loss.
/ Source: Forbes

Bombs and books drove the U.S. financial markets to a strong start on Wednesday morning.

Traders cheered the solid results posted by Boeing and Amazon, which both posted consensus-beating results for their latest quarters. Those investor-pleasing performances quickly drove the shares of both companies much higher, and buoyed the confidence of stock-watchers in morning trading.

The Dow Jones Industrial average climbed 0.6%, or 86.09 points, to 13,803.04, in the early going.

Boeing saw its shares fly high as it told Wall Street that it raked in earnings of $1.1 billion in the second quarter. The aircraft maker said it earned $1.35 per share versus a loss of $160 million, or 21 cents a share, for the year-ago period.

Revenue rose 13.6%, to $17.0 billion.

Those numbers easily beat analyst forecasts of earnings per share of $1.16 on revenue of $16.2 billion.

Boeing also sees better times ahead, and it said it would raise its 2007 guidance.

That of rosy outlook cheered investors, who pushed cash into the company. In pre-market trading, shares of Boeing kited up 2.8%, or $2.93, to $106.73.

Another source of optimism: books.

Amazon.com said its second-quarter profit more than tripled. Earnings increased to $78 million, or 19 cents per share, $22 million, or 5 cents per share, from the year-ago period.

Revenue rose 38.1%, to $2.9 billion.

Those results topped Wall Street forecasts, earning the company a host of analyst upgraded and renewed enthusiasm from traders, who pushed the shares up 27.9%, or $15.86, to $85.11.

Todd Leone, head of listed trading at Cowen, said it was Boeing and Amazon driving the morning rally.

"That is probably it," he told Forbes.com. "You know, it was Caterpillarand Google that brought the market down just a few days ago. Now Boeing and Amazon are bringing it up. So this has been an earnings-driven market."

He added, "You get into the summer and earnings are important. People look forward to the earnings and there isn't much other news."

On Tuesday, investors seemed far less cheery. The U.S. stock market, pressured by bad news from the housing, technology and energy sectors, tumbled, with the Dow Jones industrial average sliding 226.47 points, or 1.6%, to 13,716.95. (See: "U.S. Stocks Hit From All Sides.")

Bill Gross, the bond investing guru at Pacific Investment Management, said on television Tuesday afternoon that the junk bond market had experienced "an earthquake of 8.0 magnitude" in the last few weeks. (See: "Wall Street's Woes Hit Home.")

But all this volatility, the headline-grabbing ups and downs in the markets, Leone argued, has to be kept in some perspective.

"The Dow is close to 14,000," Leone said. "So when it moves 100 points, percentage wise, it's just not as big as it would be if we were still at 6,000 or 7,000."

He added, "I don't know if Boeing and Amazon can keep the market up. We'll see."

The Associated Press contributed to this article.

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