By Dan Strumpf And Saumya Vaishampayan
U.S. stocks wavered Monday after an initial burst sent the Dow
Jones Industrial Average briefly into record territory.
The Dow gained as much as 17 points to 18289.54 shortly after
the opening bell, surpassing its record close of 18288.63 reached
in early March. The blue chips later retreated to trade down 26
points, or 0.1%, to 18247.
The S&P 500 was down one point at 2121. It closed Friday at
its eighth record of the year.
The Nasdaq Composite Index was down three points, or 0.1%, to
5045.
While the S&P 500 has notched all-time highs in recent
sessions, hitting two in a row last week, the moves have been
relatively small. Last week, the Dow rose just 0.4% and the S&P
added 0.3%. The quiet trading has so far continued into Monday,
traders said.
"We're on the backside of earnings--that's basically done," said
Gordon Charlop, managing director at Rosenblatt Securities. "The
question is what is it that's going to generate some enthusiasm,
one way or the other, negative or positive? Right now there's
nothing you can say is headline grabbing."
Part of the blame for the more modest moves in stocks goes to
weak economic data, strategists say, as tepid reports dim the
outlook for earnings growth and future stock-market gains. Recent
data showed a sharp drop in consumer sentiment and a further
decline in industrial production.
The weak reports "make this year's earnings growth rate very
difficult to assess," said Gail Dudack, chief investment strategist
at Dudack Research Group, a division of brokerage Wellington
Shields & Co.
"Since multiples are slightly above average, it's been our view
that we will need earnings growth for stocks to move higher," she
added.
Including results from 465 companies in the S&P 500,
first-quarter earnings are on track to grow nearly 0.5% from a year
ago, according to FactSet. That's an improvement over the nearly 5%
decline projected by analysts at the start of earnings season.
European stocks were mixed. France's CAC 40 was nearly flat,
while Germany's DAX gained 0.9%.
Housing data was in focus Monday. A reading from the National
Association of Home Builders showed confidence in May fell two
points to a reading of 54. The figure came in below expectations of
58.
In commodity markets, gold futures added 0.2% to $1227.80 an
ounce. Crude-oil futures fell 0.1% to $59.61 a barrel.
Treasury prices slipped, lifting the 10-year yield up to 2.223%
from 2.141% on Friday.
In corporate news, Endo International PLC has agreed to buy Par
Pharmaceutical Holdings Inc. from private-equity firm TPG for about
$8 billion in cash and stock. Endo shares fell 3.1%.
Shares of Ann Inc. soared 22% after the retailer agreed to sell
itself to Ascena Retail Group Inc. for $2.2 billion in cash and
stock. Ascena shares gained 7.2%.
Shares of Eleven Biotherapeutics Inc. plunged 72% after the
company said its late-stage dry eye disease treatment failed to
meet its two primary endpoints.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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