The stock market rose on Monday as investors looked toward an earnings season expected to show modest growth despite concerns about the health of the economy.
The major market indexes fluctuated between positive and negative territory for much of the day before climbing in the final hour of trading, ending near session highs. Volume was light, and the Dow Jones industrial average’s gains were limited by a decline in shares of Johnson Johnson.
Forecasts for first-quarter earnings have been scaled back in 2013, with profits now seen rising just 1.6 percent from the quarter a year ago, according to Thomson Reuters data. In January, earnings for the quarter were expected to rise 4.3 percent.
The drop in expectations has come as economic figures suggest the recovery could be less robust than some had thought. Weak corporate results could give investors more reasons to sell, pushing both the Dow and the Standard Poor’s 500-stock index back from recent nominal closing highs.
“We’re waiting for earnings for evidence that the market can be supported at these levels,” said Jim Dunigan, chief investment officer at PNC Wealth Management. “We will see growth in earnings, but clearing the expectations bar could be difficult, which could give us reason to pause.”
The season unofficially started after the market closed with results from Alcoa, the aluminum company. It reported earnings that exceeded analysts’ expectations, but revenue was down from the quarter a year ago. After initially rising in after-hours trading, Alcoa’s stock slid 13 cents, or 1.6 percent, to $8.26.
As the first Dow component to report, Alcoa is informally viewed as setting the initial tone for the season, though many more bellwether companies will not report results until next week.
The Dow industrials rose 48.23 points, or 0.33 percent, to close at 14,613.48. The S. P. 500-stock index gained 9.79 points, or 0.63 percent, to 1,563.07. The Nasdaq composite index advanced 18.39 points, or 0.57 percent, to 3,222.25.
Stocks have rallied strongly this year. Major indexes have hit milestone highs, helped by the Federal Reserve’s stimulus program. The S. P. 500 is up 9.6 percent for the year, while the Dow has gained 11.5 percent.
Despite that, major indexes posted their worst weekly loss for 2013 last week, with the payroll report fueling concerns about economic growth.
“A lot of the momentum we had in the first quarter was based on improving economic news, and the jobs report really took the wind out of our sails,” said Mr. Dunigan, who helps oversee $116 billion in assets. “We’re still trying to sift through what that means for our prospects .”
Among the most active stocks on Monday, Advanced Micro Devices jumped 30 cents, or 13 percent, to $2.59, making it the S. P. 500’s biggest percentage gainer, after a report that Microsoft would use A.M.D. chips in its new Xbox game console.
Monster Beverage rose $2.33, or 4.7 percent, to $52.01, helping to elevate the S. P. consumer staples sector index, which rose 1.1 percent.
On the downside, the health care company Johnson Johnson fell 93 cents, or 1.1 percent, to $81.11 after JPMorgan Chase downgraded its stock to neutral from overweight, saying it faced “a messy first quarter and a likely downward revision to 2013 guidance.”
Lufkin Industries, a maker of oil field pumps, jumped $24, or 37.6 percent, to $87.96 after General Electric said it would buy Lufkin for about $3.3 billion. G.E., a Dow component, rose 19 cents, or 0.8 percent, to $23.12.
In the bond market, interest rates moved higher. The price of the Treasury’s 10-year note fell 9/32, to 102 10/32, while its yield rose to 1.75 percent, from 1.71 percent late Friday.
Article source: http://www.nytimes.com/2013/04/09/business/daily-stock-market-activity.html?partner=rss&emc=rss