NEW YORK (AP) — Shares of American Express jumped on Friday after it reported net income that more than doubled as cardholders boosted spending on holiday items.
THE SPARK: Cardholder spending grew 8 percent in the most recent quarter. Retailers were hurt by steep discounting needed to keep people shopping, but U.S. retail sales rose 3.8 percent for the November-December period compared to the same period in 2012. American Express revenue for the quarter rose 5 percent.
THE BIG PICTURE: American Express CEO Kenneth I. Chenault said some consumers are still cautious about taking on more debt, but he noted that the company saw a modest increase in cardholder loans. Also, American Express caters to more affluent cardholders, which has helped its finances during a slow economic recovery.
Susquehanna Financial Group analyst James E. Friedman upgraded American Express shares to "Positive," from "Neutral. He wrote that American Express revenue grew 4.5 percent in the first half of last year, a mark that it should have an easy time beating this year.
SHARE ACTION: Up $5.13, or 5.8 percent, to $92.91 in late morning trading. Earlier in the morning it set a new 52-week high of $93.62. It was the top gainer in percentage terms among the 30 stocks in the Dow Jones industrial average.