By Dan Strumpf
U.S. stocks advanced Thursday, lifted by a rise in oil prices,
as investors pored through the first batch of first-quarter
earnings reports.
The Dow Jones Industrial Average gained 56.22 points, or 0.3%,
to 17958.73. The S&P 500 rose 9.28 points, or 0.45%, to
2091.18, and the Nasdaq Composite Index climbed 23.74 points, or
0.5%, to 4974.56.
Energy stocks pulled ahead, mirroring a rebound in oil prices
from their biggest loss in two months. S&P 500 energy companies
gained 1.5%, as oil futures rose 0.7% to $50.79 a barrel.
Trading activity was muted, with investors awaiting additional
quarterly updates expected in the coming weeks. Money managers are
widely bracing for what is expected to be one of the weakest
earnings seasons in years.
"The market is definitely lacking catalysts right now," said Tom
Carter, managing director at JonesTrading. "That's going to
change...but it's early."
Some early high-profile earnings reports have failed to impress.
Alcoa Inc. unofficially kicked off the first-quarter reporting
season Wednesday after the closing bell, and shares fell 3.4%
Thursday. The aluminum company said it swung to a profit but its
revenue missed analysts' expectations.
Bed Bath & Beyond Inc. lost 5.4%. The retailer reported a 4%
decline in quarterly profit and projected earnings below Wall
Street estimates.
Bed Bath & Beyond notched the biggest loss in the S&P
500. Alcoa was the No. 2 decliner.
Investors are paying close attention to how companies fared in
the first quarter, after the broader economy showed signs of
hitting a speed bump. Companies in the S&P 500 are set to
report a 4.9% decline in first-quarter earnings, the worst
quarterly showing since 2009, according to FactSet.
Earnings at energy companies, in particular, are under heavy
pressure. They are expected to post a 65% drop in profits from a
year earlier, as low oil prices weigh on results. At the same time,
a strong dollar is posing an obstacle for multinational companies
with significant operations overseas.
For now, many investors expect a quiet market until the pace of
earnings reports picks up next week. On Thursday, just 6 billion
shares traded hands, making it the 11th slowest trading day this
year. The Dow last saw a move of 1% or more on March 31.
"You're in this purgatory period of pre-earnings," said Mark
Spellman, portfolio manager of the $81 million Alpine Equity Income
Fund.
Aside from earnings, investors continue to debate the timing of
rate increases by the Federal Reserve. Fed officials were divided
at their March policy meeting on whether they might raise interest
rates in June. Recent soft economic data, including a weak March
jobs report, could make a midyear rate increase even less
likely.
"The market is so concentrated on what the Fed says, but now
we're in a quietish period for Fed news," Mr. Spellman said.
"There's going to be a lot of stock-specific stuff when it comes to
earnings."
In economic news, the Labor Department said jobless claims rose
by 14,000 to 281,000 in the week ended April 4. The increase in
claims was slightly smaller than expected.
Overseas, the Stoxx Europe 600 index gained 1.1%, closing at an
all-time high, its first in 15 years. Germany's DAX added 1.1%,
notching its second-highest close on record. France's CAC 40 gained
1.4%, but remains 25% below its 2000 record.
The euro inched down to $1.0770 from $1.0782 on Wednesday.
The yield on the 10-year Treasury note fell to 1.957% from
1.895% on Wednesday. Yields fall as prices rise.
Shares of Constellation Brands Inc. rose 0.8% after the
alcoholic-beverage maker reported its first quarterly dividend
since 1973 and reported an increase in profits.
Walgreens Boots Alliance Inc. said it would close 200 domestic
stores as it continues to restructure. The company reported a 35.5%
increase in sales in its February quarter amid a severe cold
season. Shares gained 5.6%.
Gold futures shed 0.8% to $1199.60 an ounce.
Saumya Vaishampayan contributed to this article.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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