The Standard Poor’s 500-stock index notched a third consecutive record closing high on Monday and major indexes rose, though disappointing McDonald’s earnings kept the Dow from making significant gains.
Banks and health shares were the day’s best performers, with financials advancing for the 10th time in the past 12 sessions. Bank of America led the group, while United States-listed shares of UBS rose 3.2 percent to $19.23 after the Swiss bank’s second-quarter profit beat forecasts despite a charge to settle a regulatory lawsuit.
At the close, the Dow Jones industrial average was up 1.81 points, or 0.01 percent, at 15,545.55. The S.P. 500 rose 3.44 points, or 0.20 percent, to 1,695.53, and the Nasdaq composite added 12.77 points, or 0.36 percent, to 3,600.39.
Analysts said the market is likely to trend higher in the absence of any weak economic news but would need strong earnings and positive forecasts from companies to post large gains.
“Most earnings have been good, maybe not great but good, and as a consequence I think investors continue to show that equities is the asset class of choice for them right now,” said Rick Meckler, president of LibertyView Capital Management in Jersey City. “It’s difficult to see, short of some really strong economic numbers, what could push the market significantly ahead.”
Weaker-than-expected results from McDonald’s, the world’s largest restaurant chain, weighed on the Dow after the company said full-year results would be “challenged” by falling sales in Europe, its biggest market. Its shares lost 2.7 percent to $97.58.
Shares of Netflix fell 6.1 percent in after-hours trading after the company reported a higher profit for the second quarter but added fewer subscribers to its video streaming service than analysts expected.
Five of the S.P. 500 industry sectors advanced in Monday’s session. Trading volume was below average, with 5.2 billion shares changing hands on American exchanges.
The S.P. 500 has added nearly 19 percent so far this year. Recent data showed funds that hold American stocks gained $16.96 billion in the week ended Wednesday, the most since June 2008.
A rise in metal prices lifted materials shares, with Newmont Mining up 5.8 percent to $30.35, enough to lead gains in the S.P. materials sector.
Technology shares also moved higher, with Microsoft adding 1.9 percent to $32.01 after the software maker tumbled 11.4 percent on Friday following dismal results.
The PHLX housing sector index fell 0.8 percent after an unexpected drop in American home resales in June. The data also gave support to bets that the Federal Reserve will extend its rate of bond purchases to support the economy.
September, however, remains the most likely time for the Fed to announce that it will begin scaling back its $85 billion a month in bond purchases, according to a Reuters poll.
Nearly one-third of S.P. 500 companies are expected to report earnings this week, including Apple on Tuesday.
Of the 109 companies in the S.P. 500 that have reported earnings for the quarter, 64.2 percent have beaten analyst expectations, while fewer than half have topped revenue estimates, Thomson Reuters data showed.
Article source: http://www.nytimes.com/2013/07/23/business/daily-stock-market-activity.html?partner=rss&emc=rss
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