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 eight points, or 0.4%, to 2117 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 72 points, or 0.4%, to
18094, and the Nasdaq Composite rose 19 points, or 0.4%, to
5024.
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 500 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.
Wayne Lin, a portfolio manager at QS Investors, said he views
the slowdown in U.S. economic growth as temporary and remains
positive on stocks for the year. He said he's focused on monetary
policy in Europe and Japan aimed at reviving growth, which could
boost demand for goods produced by U.S. companies and lead to
higher earnings. "If these efforts lead to growth, that's going to
be very positive for the global economy, for U.S. companies, for
U.S. earnings, and ultimately for stock valuations," he said.
Eight of the S&P 500's 10 sectors advanced Monday. Stocks in
the utilities sector gained the most, up 1%, followed by a 0.9%
increase in financial stocks.
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%.
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%.
Friday's employment report is the highlight of U.S. economic
news this week, investors said. The report 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 0.7%.
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 1.9%.
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 1.2%.
Cisco Systems Inc. said Chuck Robbins would be its next chief
executive, effective July 26, replacing longtime leader John
Chambers. Shares added 0.4%.
In commodity markets, gold futures rose 1% to $1186.80 an ounce.
Crude-oil futures fell 0.4% to $58.93 a barrel.
The yield on the 10-year Treasury note inched up to 2.132% from
2.119% on Friday. Yields rise as prices fall.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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