Encouraging news on economy fails to lift stocks
NEW YORK — Encouraging news on the U.S. economy wasn't enough to give the stock market its fourth straight day of gains.
Manufacturing grew faster in April than in March as exports picked up and factories accelerated hiring. American shoppers ramped up their spending in March at the fastest pace in 4 ½ years and construction spending also ticked higher.
The reports, released a day after the Commerce Department said U.S. growth stalled in the January-March quarter, suggest that the economy is gaining momentum after the unusually harsh winter.
The market remains close to its all-time highs, but for now investors, uncertain about which way the economy is headed, appear reluctant to push stocks higher.
“The data was good, but not robust enough to completely eliminate doubts over whether the first quarter was entirely weather-related,” said Anthony Valeri, an investment strategist for LPL Financial.
The Standard & Poor's 500 index fell 0.27 points, or less than 0.1 percent, to 1,883.68. The Dow Jones industrial average fell 21.97 points, or 0.1 percent, to 16,558.87. The Dow closed at an all-time high on Wednesday. The Nasdaq composite rose 12.90 points, or 0.3 percent, to 4,127.45.
Investors' reaction to the economic reports was likely muted ahead of Friday's April jobs report, Valeri said. Economists are predicting U.S. employers added 210,000 jobs last month and that the unemployment rate dipped to 6.6 percent from 6.7 percent.
In earnings news, Avon Products slumped $1.56, or 10.2 percent, to $13.72 after the beauty products company said its first-quarter loss widened, stung by volatile currency moves in Venezuela and weak revenue across all regions. Profit and revenue fell short of Wall Street expectations.
MasterCard and Yelp were among the companies that gained upon reporting their latest quarterly earnings.
MasterCard rose 67 cents, or 0.9 percent, to $74.22. The company reported that its net income climbed 14 percent in the first quarter as more spending by cardholders worldwide lifted the company's results.
Yelp rose $5.70, or 9.8 percent, to $64.02. The company said late Wednesday that its first-quarter loss narrowed as more local businesses signed up for the online review site's services. The results were better than the market expected, and the company raised its revenue guidance for the year.
Overall, the trend in U.S. company earnings has been steady, if not spectacular, improvement.
More than 60 percent of the companies in the S&P 500 have reported earnings for the first quarter. Analysts expect earnings for the period to rise by 1.7 percent, compared with growth of almost 8 percent in the fourth quarter and 5.2 percent in the same period a year ago, according to data from S&P Capital IQ.
“There's a lot of noise around the trend, but the trend is positive. ... Earnings are coming in OK, and that makes me happy,” said Karyn Cavanaugh, senior market strategist at Voya Investment Management. “Investors need to get into this market.”
Treasury prices rose. The yield on the 10-year Treasury note fell to 2.61 percent from 2.65 percent, and is close to its lowest level of the year.
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.
- Black Friday chaos dwindles thanks to earlier deals, online sales
- Employers cut back on holiday office parties
- Convinced Fed will raise rates in December, investors parse meaning of ‘gradual’ increase
- Nimble Regal ready for winter with all-wheel drive
- Fuel cell standoff slows car technology’s rise in popularity
- $170.4M AmEx charge yields whopping perk for Chinese billionaire
- Stocks close quiet week with little change
- Small stores take big gamble by not upgrading credit card readers
- Key gets stuck in ignition
- Stop neighbors from stealing your Internet
- Collectors willing to overpay for silver, value ‘all in the eye of the beholder’