Stocks edged higher on Monday in a trading session marked by uncharacteristic quiet after a turbulent week.
In the absence of major economic news, stocks rode a tail wind of optimism from the most recent employment numbers released on Friday and hope for more action by European authorities to address the Continent’s debt crisis.
The Dow Jones industrial average closed up 21.34 points, or 0.16 percent, at 13,117.51. The broader Standard Poor’s 500-stock index added 3.24 points, or 0.23 percent, to 1,394.23.
At one point in Monday’s trading, the S. P. was within half a point of 1,400, which it has not touched since May 3.
The Nasdaq composite index rose 22.01 points, or 0.74 percent, to 2,989.91.
The stock market fell the first four days of last week as investors, worried about the weak economy, were disappointed by the lack of specific action from the Federal Reserve and the European Central Bank. The Dow lost 197 points from Monday through Thursday.
But the Dow soared 217 points on Friday after a surprisingly strong jobs report. The American economy generated 163,000 jobs last month, far more than expected.
The upturn was seen as a sign that the United States may be resilient enough to pull out of a midyear slump and grow modestly as the rest of the world slows down.
Stock markets also rose in Europe on Monday. Speculation has been building that the European Central Bank would ultimately support struggling countries like Spain and Italy by buying bonds issued by those governments. The DAX index in Germany and the CAC-40 in France both rose a little less than 1 percent.
Spain’s IBEX 35 soared 4.4 percent despite a five-hour blackout from a technical problem that halted trading for much of the day.
“Mutual fund managers and hedge funds have sizable holdings in cash and they need to put those to work,” said Richard Cripps, chief investment officer for Stifel Financial. “There’s optimism over the progress made in Europe and also constructive news from the U.S. economy.”
Shares of the Knight Capital Group stock fell 98 cents, or 24 percent, to $3.07 on Monday after the beleaguered stock trading firm lined up financing that will allow the firm to continue to operate. Knight said a group of investors had agreed to buy $400 million of preferred stock that can be converted into a 73 percent stake in the firm.
Knight’s stock is down 70 percent since last Tuesday, the day before a software malfunction caused its computer systems to send erroneous orders flooding into the market. The firm’s future was thrown into doubt after the malfunction cost it $440 million.
Going in the opposite direction was Best Buy, which jumped $2.35, or 13 percent, to $19.99 after its founder and former chief executive, Richard M. Schulze, offered to buy the company at a premium to its stock price. Mr. Schulze, 71, is its largest shareholder with a 20 percent stake.
Cognizant Technology Solutions, the consulting company, jumped $6.34, or 11 percent, to $64.21 after its second-quarter results beat Wall Street’s estimates. The company raised its full-year earnings forecast.
The Interpublic Group, a marketing company, fell 86 cents, or 8 percent, to $10.11 after a rival, the Publicis Groupe of France, shot down a report that it was weighing a bid to buy the American advertising company.
Tyson Foods fell $1.23, or 8 percent, to $14.17 after the company reported that income dropped 61 percent in the quarter.
Pluristem Therapeutics climbed 49 cents, or 15 percent, to $3.80. The Israeli drug maker said a cancer patient’s life was saved with the use of certain cells it had developed.
The bond market was also quiet on Monday. The price of the Treasury’s 10-year note rose 1/32, to 101 22/32, while its yield was unchanged from late Friday at 1.57 percent.
Article source: http://www.nytimes.com/2012/08/07/business/daily-stock-market-activity.html?partner=rss&emc=rss
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