By Saumya Vaishampayan
U.S. stocks rose for the second session in a row Monday, pushing
the S&P 500 index near its all-time high.
The S&P 500 gained seven points, or 0.3%, to 2115 in
afternoon trade, flirting with its record close of 2117.69 hit on
April 24.
The S&P rose as high as 2121.06 earlier in the session. The
index remains just short of its all-time intraday high of 2125.92,
reached on April 27.
The Dow Jones Industrial Average added 59 points, or 0.3%, to
18083, and the Nasdaq Composite rose 18 points, or 0.4%, to
5024.
Eight of the S&P 500's 10 sectors were in positive
territory. Utilities stocks rose the most, up 1.3%, followed by a
0.8% gain in health-care stocks.
Traders said there wasn't one piece of news driving Monday's
broad-based gains. A handful of better-than-expected earnings
reports and gains in European and Chinese shares added to the
positive tone.
"Now the question is if the market can truly break out to new
highs," said Bill Nichols, head of U.S. equities at Cantor
Fitzgerald. The S&P fell in three of the four sessions after
hitting its last all-time closing high on April 24, pulling back
1.5%. "History has shown recently that you sell this rally," he
said.
Action in the U.S. stock market has been choppy this year, as
investors grapple with evidence of an economic slowdown at the
start of the year, the strong dollar's drag on earnings and the
possibility of higher interest rates. The Dow fell in January,
rallied in February, pulled back in March and eked out a gain in
April. The blue-chip index has gained 1.1% for the year, through
Friday's close. The S&P 500 has advanced 2.4% and the Nasdaq
Composite is up 5.7% in the same period.
Last week's Federal Reserve statement, which didn't signal any
shift in its policy stance, paved the way for a rebound in stocks,
said J.T. Cacciabaudo, global head of equity sales trading at
Sterne Agee CRT. "People like certainty versus uncertainty," he
said.
Overseas, European stocks advanced after data showed the
eurozone's manufacturing sector expanded in April, though at a
slightly slower pace than in March. Germany's DAX gained 1.4% and
France's CAC 40 rose 0.7%.
European stocks have outpaced their U.S. peers this year as the
European Central Bank eases monetary policy in an attempt to
jump-start economic growth. "In years past it was all about the
U.S. equity market," said Chris Gaffney, president of EverBank
World Markets. "Now global investors are looking elsewhere, and
that could be a drag on U.S. equities," he added.
Data showing a slowdown in Chinese manufacturing activity in
April suggested Beijing may need to take further steps to bolster
the economy, boosting stocks. The Shanghai Composite Index rose
0.9%.
U.S. economic reports this week will culminate with Friday's
employment report, which is expected to show employers added
228,000 jobs in April, according to economists surveyed by The Wall
Street Journal. The unemployment rate is expected to tick down to
5.4% from 5.5%.
Investors continued to watch first-quarter earnings. Including
results from 372 companies in the S&P 500, earnings are on
track to rise 0.1% in the first quarter. That compares with
expectations of a 4.6% decline going into the reporting season.
Sales are on track to fall 2.6%, in line with expectations.
Comcast Corp. reported better-than-expected profit and revenue
growth in its first quarter, as its broadband division posted its
strongest revenue growth in more than four years. The company also
announced it will spend another $2.5 billion buying back shares
this year. Shares rose 0.5%.
Tyson Foods Inc. said its profit rose 46% in the first three
months of the year, topping expectations. Sales growth came in
slightly below expectations as the company faced lower prices for
pork and chicken. Shares rose 2.2%.
Sysco Corp. said its first-quarter profit fell 2% on higher food
costs, currency effects and charges related to the company's
pending acquisition of rival US Foods Inc. Excluding certain items,
per-share earnings topped expectations while revenue fell short of
estimates. Shares added 0.1%.
In other corporate news, McDonald's Corp. Chief Executive Steve
Easterbrook unveiled his strategy to revive the struggling
fast-food chain. He outlined plans to save $300 million a year by
accelerating refranchising, restructuring under new segments and
cutting down on bureaucracy. Shares fell 0.4%.
Cisco Systems Inc. said Chuck Robbins would be its next chief
executive, effective July 26, replacing longtime leader John
Chambers. Shares added 0.5%.
In commodity markets, gold futures rose 1.2% to $1189.10 an
ounce. Crude-oil futures fell 0.4% to $58.94 a barrel.
The yield on the 10-year Treasury note inched up to 2.133% from
2.119% on Friday. Yields rise as prices fall.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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