By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks climbed modestly on
Monday, with the S&P 500 and the Dow industrials rising to
record closing highs again, after Citigroup Inc. reported
better-than-expected earnings.
The S&P 500 index (SPX) climbed 2.31 points, or 0.1%, to
1,682.50, rising for an eighth consecutive session, its longest run
higher since an eight-session stretch that ended Jan. 25. It also
marked another all-time finish, its 20th so far this year.
Analysts at Bank of America Merrill Lynch raised their 2013
year-end target for the S&P 500 to 1,750 from 1,600
previously.
Utilities paced sector gains Monday and telecommunications led
the losses in the S&P 500. Citigroup's (C) shares rose 2% after
the banking giant reported a steep jump in second-quarter
profit.
"It's a big earnings week, but expectations are modest, so it'll
be interesting to see how companies perform with lowered
expectations," said Paul Mangus, head of equity research and
strategy at Wells Fargo Private Bank.
A better-than-forecast manufacturing report helped neutralize
worse-than-anticipated U.S. retail-sales data.
"We're encouraged that the market is focusing on fundamentals
again," said Mangus added.
The Dow Jones Industrial Average (DJI) rose 19.96 points, or
0.1%, to 15,484.26, a record closing high -- its 26th this
year.
Dow component Boeing Co. (BA) shares rose 3.7%, regaining a
large chunk of Friday's losses, after British investigators
reportedly found no evidence that batteries caused a fire on one of
the manufacturer's 787 planes. Are Boeing shares immune to
Dreamliner woes?
The Nasdaq Composite index (RIXF) rose 7.41 points, or 0.2%, to
3,607.49.
More than 567 million shares traded on the New York Stock
Exchange. Composite volume topped 2.57 billion.
Gold prices rose, with August futures (GCQ3) rising 0.5% to end
at $1,283.50 an ounce on the Comex division of the New York
Mercantile Exchange. The cost of crude also increased, with oil
futures (CLQ3) rising 37 cents to $106.32 a barrel.
Crude's spike has been "a fairly quick reaction to geopolitical
events, so it may be a blip, only time will tell," said Mangus at
Wells Fargo, referring to recent turmoil in Egypt.
Treasury yields fell, with the yield on the 10-year note
(10_YEAR) used in determining mortgage rates and other consumer
loans at 2.55%.
The dollar (DXY) climbed against the currencies of major U.S.
trading partners, including the Japanese yen (USDJPY).
U.S. stock-index futures had added slightly to gains after
economic reports that had manufacturing in the New York region
expanding to a five-month high in July and U.S. retail sales up
0.4% in June, advancing less than forecast.
"The consumer was a bit weaker than expected in the second
quarter," noted Dan Greenhaus, chief global strategist at BTIG LLC,
in an email.
In light of the retail-sales report, "there is a very real
possibility second quarter GDP will be less than 1% for the second
time in the last three quarters," Greenhaus said. Read a commentary
piece: Is the economy getting close to contraction?
The economy slowed somewhat in the second quarter relative to
year-ago growth, intensifying the importance of corporate guidance
as to what's to come in the next two quarters and 2013, Wells
Fargo's Mangus said.
Another economic report had U.S. business inventories rising
0.1% in May.
Both the Dow industrials and the S&P 500 climbed to record
closes on Friday following upbeat earnings from two major banks and
after Federal Reserve Chairman Ben Bernanke voiced support for
continued monetary stimulus.
Bernanke is scheduled to testify about the U.S. economic and
policy outlook before the House Financial Services panel on
Wednesday, and before the Senate Banking Committee on Thursday.
"The interpretation of Mr. Bernanke's comments will be
important. It's a matter of when, not if," said Mangus of
expectations that the Fed will start cutting back on its $85
billion in monthly bond purchases later this year or early in
2013.
Shares of Leap Wireless International Inc. (LEAP) soared after
AT&T Inc. (T) late Friday said it would purchase the provider
of prepaid-mobile services for $15 a share, or nearly $1.2
billion.
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