By Saumya Vaishampayan
U.S. stocks opened higher Monday, boosted by a handful of
better-than-expected earnings reports and gains in European and
Chinese shares.
The Dow Jones Industrial Average added 71 points, or 0.4%, to
18095. The S&P 500 gained nine points, or 0.4%, to 2117, and
the Nasdaq Composite rose 23 points, or 0.5%, to 5028.
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.
"We've been just waffling back and forth," said Chris Gaffney,
president of EverBank World Markets.
Stocks rose Friday, but logged weekly losses in part due to soft
economic data. The Dow gained 1% on Friday to 18024.06 and the
S&P 500 added 1.1% to 2108.29.
Gains in European and Chinese stocks added to Monday's positive
tone.
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 1.3% and France's CAC 40
rose 1%.
European stocks have outpaced their U.S. peers this year as the
European Central Bank eases monetary policy in an attempt to
jump-start economic growth. "In years past it was all about the
U.S. equity market," said Mr. Gaffney of EverBank World Markets.
"Now global investors are looking elsewhere, and that could be a
drag on U.S. equities," he added.
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%.
U.S. economic reports this week will culminate with Friday's
employment report, which is expected to show employers added
220,000 jobs last month as the unemployment rate ticked down to
5.4% from 5.5%.
On Monday, factory orders are expected to rise 1.9% in March,
according to economists surveyed by The Wall Street Journal.
Investors also 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 1%.
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 2.5%.
Sysco Corp. said its first-quarter profit fell 2% on higher food
costs, currency effects and charges related to the company's
pending acquisition of rival US Foods Inc. Excluding certain items,
per-share earnings topped expectations while revenue fell short of
estimates. Shares slipped 0.1%.
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%.
Cisco Systems Inc. said Chuck Robbins would be its next chief
executive, effective July 26, replacing longtime leader John
Chambers. Shares added 0.6%.
In commodity markets, gold futures rose 1.1% to $1187.40 an
ounce. Crude-oil futures slipped 0.5% to $58.88 a barrel.
The yield on the 10-year Treasury note inched down to 2.096%
from 2.119% on Friday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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