U.S. Stocks Get a Boost from Strong Corporate Results
April 16 2018 - 9:41AM
Dow Jones News
By Georgi Kantchev
U.S. stocks edged higher on Monday as companies that reported
strong corporate earnings helped push major indexes higher.
The Dow Jones Industrial Average gained 155 points, or 0.7%, to
24519 in early-morning trading. The S&P 500 added 0.5%, while
the Nasdaq Composite rose 0.2%.
The start of the latest earnings season contributed to the gains
major indexes accrued early Monday morning. Shares of trucking
company J.B. Hunt Transport Services were among the biggest gainers
in the S&P 500 after it reported stronger-than-expected revenue
for the first quarter of the year, leading the broad index's
industrial sector higher.
J.B. Hunt shares climbed 4.5%, while the broader industrial
segment of the S&P 500 added 0.8%.
However, while companies are expected to broadly report gains in
profit and revenue for the first three months of the year, some
investors worry that stocks will have a muted response since
valuations are still relatively high, even after the recent
pullback helped pull down forward-earning multiples for the S&P
500. Meanwhile, the labor market is tight, which could nudge
inflation to grow more quickly than expected and resource costs
could soon become problematic, said Jim Paulsen, chief investment
strategist of the Leuthold Group.
Shares of Bank of America, for example, added only 0.1% after
the bank said Monday that a boost from the U.S. tax law and
continued rising interest rates helped push first-quarter profit
higher, mirroring the weak performance among financial stocks that
had reported strong earnings on Friday.
"For a host of reasons, investors should probably moderate
upside expectations due to robust earnings results this year," Mr.
Paulsen said.
Investors breathed a sigh of relief after missile strikes late
Friday by the U.S., U.K. and France on Syria didn't lead to a major
escalation in the seven-year-old conflict. A Pentagon official said
that the single wave of strikes is complete for now, while in a
Twitter post Saturday, President Donald Trump said "Mission
Accomplished!"
"Uncertainties can escalate again, but so far the biggest fears
haven't been realized, which allows risky assets to recover," said
Viraj Patel, a strategist at ING Bank.
Geopolitical concerns, trade tensions and some
weaker-than-expected economic numbers rattled investor sentiment in
recent weeks amid fears those factors could hit a rare spurt of
synchronized global economic upswing.
Elsewhere, the Stoxx Europe 600 fell 0.4%, dragged down by
energy stocks, while Asian markets ended mixed.
Asian stocks' early gains eroded Monday, led by declines in Hong
Kong and mainland China over worries about the Hong Kong dollar,
though Japanese stocks rose.
The Hang Seng Index ended down 1.6% while the Shanghai Composite
Index of big-cap Chinese stocks was down 1.5%. Japan's Nikkei Stock
Average finished up 0.3%.
--Michael Wursthorn contributed to this article.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
April 16, 2018 10:26 ET (14:26 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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