Stocks were mixed on Monday as an assortment of corporate earnings pointed to an uncertain growth outlook, which could lead to more volatile trading ahead.
In afternoon trading the Standard Poor’s 500-stock index gained 0.2 percent, and the Dow Jones industrial average lost 0.2 percent, while the Nasdaq composite rose 0.5 percent.
While a majority of S.P. 500 companies that have reported earnings so far have topped analysts’ expectations, as is typical, a number of high-profile disappointments have raised questions about whether the market’s steep run so far this year may be out of gas.
General Electric and McDonald’s both fell for a fourth straight day, extending declines from Friday, when both companies reported lackluster results. G.E. is down more than 8 percent over the last four sessions and on Monday, it fell 2.1 percent, while McDonald’s lost 1.2 percent.
“Weak corporate outlooks have added to the growth fears that are making investors more risk averse,” said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia. “Ultimately, we think cyclical names will lead the market higher, but in the short term, the decline could continue.”
Last week was marked by heightened volatility, with the Chicago Board Options Exchange’s Volatility Index — the VIX, also known as the fear index — jumping 24 percent, the biggest weekly gain this year. The VIX was up 1.9 percent at 15.26 at midday on Monday, off its intraday high of 16.00.
The swings were largely driven by weak corporate earnings and signs of slowing growth from China, which contributed to a precipitous drop in commodity prices. The week’s decline fueled talk that the market’s long-awaited pullback had arrived, though the S.P. remains up 9 percent on the year.
The Nasdaq held in modestly positive territory on strength in Microsoft, which jumped 3.5 percent after CNBC reported that ValueAct Capital had taken a $2 billion stake in the company.
Netflix was the S.P.’s top percentage gainer, up 4.9 percent. The online movie rental company is set to report its results after the market closes.
The National Association of Realtors said existing home sales slipped 0.6 percent last month to a seasonally adjusted annual rate of 4.92 million units. Economists polled by Reuters had expected home resales to rise to an annual rate of 5.01 million units.
Caterpillar cut its outlook for 2013 early Monday, and but shares rose 2.7 percent by early afternoon. Halliburton, which reported a $1 billion charge related to talks to settle claims involving the 2010 Gulf of Mexico oil spill, rose 4.7 percent.
Italy’s blue-chip shares led European stocks higher, heartened by signs of progress in breaking a long political stalemate after a week of broad market losses.
The Japanese yen weakened toward 100 to the dollar on Monday and shares rose after the Group of 20 meeting of nations accepted Japan’s bold stimulus policies, helping to counter the gloom over the global growth outlook.
In its communiqué after a two-day meeting, the G-20 avoided any direct criticism of Japan’s policies and appeared to accept the need to reflate the world’s third largest economy as part of efforts to invigorate a shaky global economic recovery.
The Nikkei index in Tokyo ended the day 1.9 percent higher. Elsewhere in Asia, markets were mixed, with the Hang Seng in Hong Kong 0.1 percent higher, while the Shanghai composite 0.1 fell percent.
European stock markets were on course for a second straight daily gain, helped up by a jump in Italy’s blue-chip index after the country’s long-running political crisis moved a step closer to resolution.
Milan’s FTSE MIB index gained as much as 2 percent on hopes the re-election of Italy’s 87-year-old president, Giorgio Napolitano, would see a new government emerge within days, ending two months of political stalemate.
The broad FTSEurofirst 300 index ended the trading day up 0.2 percent, while Paris’s CAC 40 closed unchanged and Frankfurt’s DAX gained 0.2 percent.
Oil also rebounded, extending its gains into a third day as low prices brought buyers back into the market. Benchmark light, sweet crude gained 0.3 percent, to $88.30 a barrel.
Article source: http://www.nytimes.com/2013/04/23/business/daily-stock-market-activity.html?partner=rss&emc=rss
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