US stocks rise as earnings season kicks off
Specialists Michael O’Connor, Peter Giacchi, and Douglas Johnson, foreground left to right, work at the post that handles Sprint on the floor of the New York Stock Exchange Monday, July 8, 2013. US stocks Monday ended higher as investors looked forward to the kickoff of earnings season. AP PHOTO/RICHARD DREW
NEW YORK CITY—US stocks Monday ended higher as investors looked forward to the kickoff of earnings season.
The Dow Jones Industrial Average rose 88.85 (0.59 percent) to 15,224.69.
The broad-based S&P 500 increased 8.57(0.53 percent) to 1,640.46, while the tech-rich Nasdaq Composite Index added 5.45 (0.16 percent) to 3,484.83.
Investors were not expecting specially impressive earnings for the second quarter.
Current forecasts suggest profit growth of just 0.8 percent and revenue growth of only 1.2 percent from S&P 500 companies, said Briefing.com analyst Patrick O’Hare.
However, investors will focus more on what companies say about the rest of the year, analysts said. The hope is that Friday’s strong jobs report and other recent indicators of economic improvement will translate into better earnings in the second half of 2013.
“Investors realize we did not have blockbuster growth in the first half, but they are focused on the quarters ahead,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “The stock market is forward-looking.”
Leading banks scored outsized gains, including Citigroup (up 2.0 percent) Wells Fargo (up 1.8 percent) and Bank of America (up 1.7 percent). The gains followed a bullish report from Raymond James, which sees stronger asset quality fueling earnings growth in the sector, according to Barrons.com.
Retail giant Walmart also had a good day, rising 2 percent.
Dow component Intel dropped 3.6 percent following a downcast note from Citigroup that predicted weak profits in light of the declining personal computer market.
Alcoa, traditionally first to report quarterly earnings, rose 11 cents (1.4 percent) to $7.92 during the day and was flat after releasing its second quarter figures, which came in with earnings of 7 cents per share, one cent above expectations. Profits fell from the first quarter due to lower aluminum prices.
Computer company Dell jumped 3.1 percent to $13.34 after the closely watched Institutional Shareholders Services advisory group endorsed a proposed transaction led by Dell founder Michael Dell to take the company private. The offer would pay $13.65 per share.
Thomson Reuters rose 0.2 percent after announcing that it would suspend the early release of key economic data to high-speed traders. The move comes in response to an investigation by the New York state attorney general on whether the release of the data gives an unfair advantage to buyers of the high-priced service.
Bond prices rose. The 10-year Treasury fell to 2.64 percent compared with 2.71 percent Friday. The yield on the 30-year bond declined to 3.64 percent from 3.68 percent. Bond prices and yields move inversely.
