Wall St lifted by upbeat profits (FT.com)

A series of upbeat earnings reports on Thursday helped lift US shares in early trade but investor enthusiam was tempered by ongoing concerns in the credit markets and the subprime mortgage sector.

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The S&P 500 index was up 0.1 per cent at 1,467.91 by midday in New York while the Nadaq Composite Index was 0.4 per cent higher at 2,562.93. The Dow Jones Industrial Average was up 0.3 per cent at 13,402.61. The gains added to the late sharp rally on Wednesday.

Solid earnings from Nokia sent shares of the mobile phone maker 7.1 per cent higher at $30.43 on the New York Stock Exchange.

Viacom (NYSE:VIA.B) posted higher revenue and a narrower-than-expected quarterly loss, aided by strong DVD sales and the box office revenue generated by the film "Shrek The Third." Its shares were up nearly 3.2 per cent up at $39.

These results came closely on the heels of strong results from from Walt Disney and Starbucks (NASDAQ:SBUX) after Wednesday's market close. Walt Disney reported a rise in quarterly profit, lifted by strength in its TV and theme park businesses. Shares in the group rose 0.8 per cent to $34.10.

Starbucks also posted higher profit and sales. Its shares rose 2.9 percent to as high as $28.00, though by late morning they were down 0.2 percent at $27.15.

Eastman Kodak (NYSE:EK) swung to a profit, helped by continued cost-cutting efforts and a hefty gain from the sale of its health-care group. The stock gained 3.9 per cent.

Shares of CVS Caremark rose 2.2 per cent after the company said its second-quarter net income more than doubled from its first full quarter as a combined company.

However, the market remained pre-occupied with subprime related issues as mortgage lender Accredited Home Lenders (NASDAQ:LEND) said it was not certain it would continue to operate due to the adverse conditions in the subprime mortgage market, in a filing with the Securities and Exchange Commission. Shares of the company tumbled 20 per cent.

Analysts cautioned that stock markets likely to continue to display significant volatility as investors continue to worry about the potential fallout from subprime problems.

Andrew Wilkinson, senior market analyst at Interactive Brokers said the CBOE's Vix index of market volatility had retreated from Wednesday's peak of 26.22 as investors braced for 'peak-selling.'

"Although a sense of calm returned as the Dow rang up a 1.1 percent gain to close the previous, the Vix remains notably elevated and is now set to close above a value of 20 for the sixth straight session."

"Judging by the fact that the Vix is lower by 5 per cent today [on Thursday] while index values are mixed makes it hard to tell whether investors are stepping back or adding new positions," he said.

NYSE Euronext shares meanwhile fell 2 per cent after the transatlantic stock exchange reported a rise in second quarter earnings.

The report reflected the first time that the pan-European exchange Euronext, which was bought by the New York Stock Exchange earlier this year, contributed to earnings.

In deals news, financial data processor Fiserv (NASDAQ:FISV) said it would acquire the electronic payment processing company Checkfree for $4.4bn in cash, soothing recent concerns that dealmaking would dry up on Wall Street in the midst of credit market troubles.

Shares in Checkfree soared 24 per cent to $45.81 on the news.

Dell (NASDAQ:DELL) rose 1 per cent after it agreed to buy the ASAP Software unit of Corporate Express for $340m .

Wall Street also took note of better-than-expected jobs data as the US Labor Department said that jobless claims were up 4,000 to 307,000 on a seasonally-adjusted basis in the week ended July 28.

Analysts had expected a rise of 9,000 claims for the week.

Separately, the Commerce Department said June factory orders rose 0.6 per cet, less than expected, on lower orders for auotmobiles, computers and electrical goods.

Traders were otherwise awaiting Friday's release of non-farm payrolls, a closely watched gauge of economic health.

The data will be even more keenly watched than usual because of concerns about US housing market weakness.

At the end of the Wednesday's session, stocks staged a sharp rally in the last half hour to end higher amid almost record trading volumes on most equity and derivatives exchanges.