Stocks rise ahead of earnings season
NEW YORK — Stocks ended modestly higher on Monday, shrugging off an early decline, as investors waited to see whether big companies would deliver on expectations of strong earnings in 2013.
Alcoa became the first major company to report earnings on Monday, and the results were mostly good. The aluminum maker's income was higher than analysts were expecting, but its revenue fell slightly short of expectations. Later this week, the pace picks up with reports from Bed Bath & Beyond, Wells Fargo and JPMorgan Chase.
A big factor driving the Standard & Poor's 500 up 9.6 percent this year has been optimism that it will be a good year for company profits. While the expectations for the first quarter are relatively modest, many investors are expecting to see more of a pickup in earnings later in the year.
“We need to see some earnings growth here to justify the big gains we've seen in the first quarter,” said Ryan Detrick, a senior technical analyst at Schaeffer's Investment Research.
Earnings for companies in the S&P 500 index are expected to rise by 0.7 percent from the first quarter of last year, but that growth is expected to accelerate sharply to 13 percent in the final three-month period of the year, according to data from S&P Capital IQ.
On Monday, the Dow Jones industrial average rose 48.23 points, or 0.3 percent, to close at 14,613.48. The index started the day lower and fell as much as 67 points during morning trading. Alcoa's gain of 1.8 percent was one of the biggest in the Dow. It rose 15 cents to $8.39. The stock was off seven cents in after-hours trading.
The S&P 500 index closed up 9.79 points, or 0.6 percent, at 1,563.07.
The Dow and S&P have struggled for direction over the past three weeks. The S&P 500 has alternated between gains and losses every day as investors take advantage of any weakness to add to their holdings.
Telecommunications stocks fell 0.5 percent and health care stocks inched up just 0.2 percent, lagging the rest of the market. Health care companies are up almost 16 percent.
, making them the best performers in the S&P 500.
Lufkin Industries, an oilfield equipment maker, surged $24.03, or 38 percent, to $87.96 after General Electric Co. agreed to buy the company for $3 billion.
Johnson & Johnson logged the biggest percentage decline on the 30-member Dow Jones industrial average, dropping 93 cents to $81.11. Analysts at JPMorgan cut their rating on the stock to “neutral,” saying it has risen too far, too fast. Johnson & Johnson is up 16 percent this year.
Stocks fell on Friday after the government reported a slowdown in hiring that was far worse than economists had expected. The report capped a bad week: The S&P 500 logged its biggest weekly decline of the year as signs emerged that growth is starting to cool.
In other trading, the Nasdaq composite index rose 18.39 points, or 0.6 percent, to 3,222.25.
The yield on the 10-year Treasury rose to 1.75 percent from 1.71 percent on Friday.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Auto review: Grand Cherokee goes the distance
- Unemployment rate ticks up; 209K jobs added but less than expected
- Westinghouse wins deal to build nuclear power plant in Bulgaria
- EPA talks on pollution limits trigger protests, arrests Downtown
- It’s lights out for Bayer sign on Mt. Washington
- Roundup: Huntington Bancshares to cut 200 jobs; Kennametal posts drop in 1Q profit; more
- Groups stand against ‘sub-minimum’ wage for workers with disabilities
- Sunoco Logistics’ 300-mile pipeline dealt setback
- Software developers aim to ease crush of emails for businesses
- French company Iliad bidding for T-Mobile US
- Vitaminwater goes back to old formula because of outcry