By Saumya Vaishampayan
U.S. stocks rose slightly Wednesday, a continuation of
back-and-forth action amid mixed first-quarter earnings.
The Dow Jones Industrial Average rose 52 points, or 0.3%, to
18002. The S&P 500 gained five points, or 0.3%, to 2102, and
the Nasdaq Composite Index added one point to 5015.
The Dow had fallen about 62 points at its low of the
session.
Including results from 113 companies in the S&P 500,
earnings are on track to fall 3.9% from a year ago, according to
FactSet. About 76% of those companies have beaten profit
expectations that were slashed heading into the reporting season.
Still, earnings so far haven't yet sparked a broad move in stocks.
Recent action in the major indexes has been choppy, leaving indexes
trading in a range below all-time highs. The Dow and S&P
haven't hit a fresh record since March 2.
On Wednesday, McDonald's Corp. reported a 2.6% drop in a key
revenue metric in the U.S. during its first quarter. The fast-food
giant posted a larger-than-expected decline in profit amid
foreign-currency impacts and restructuring charges. Shares rose
4.2% as total revenue was in line with Wall Street
expectations.
Coca-Cola Co. reported better-than-expected profit and revenue
in its first quarter, as beverage volumes inched up 1%. Shares
added 1.4%.
Boeing Co. said first-quarter profit rose 38%, but its revenue
growth didn't keep pace and costs tied to its flagship 787
Dreamliner program continued to mount. Shares fell 1.7%.
"I really don't feel like we're getting the growth in revenues
that makes me enthusiastic about earnings going forward," said
Carlton Neel, who manages about $1.4 billion as a senior managing
director and portfolio manager at Euclid Advisors LLC.
Many portfolio managers say that while valuations are elevated,
they aren't yet worrisome. The S&P 500 trades at 17.4 times the
previous 12 months' earnings, according to FactSet. That is above
the 10-year average of 14.6.
"The market is not cheap...but the reality is there's nowhere
else to go, " said Tom Digenan, who manages $6.5 billion as head of
U.S. equities at UBS Global Asset Management.
Mr. Digenan said he has become a little more aggressive looking
for opportunities in the energy sector. "We're trying to play the
names that are a little bit more sensitive to the price of oil," he
said. Mr. Digenan said that earlier this year, he bought stocks of
oil-services companies, which could benefit from a stabilization in
oil prices.
Energy stocks in the S&P rose 0.5% Wednesday, notching one
of the biggest sector gains.
In commodity markets, gold futures fell 1.3% to $1187.20 an
ounce. Crude-oil futures added 0.2% to $56.76.
The yield on the 10-year Treasury note rose to 1.957% from
1.913% on Tuesday. Yields rise as prices fall.
Overseas stock action was mixed.
France's CAC 40 rose 0.3%, while Germany's DAX lost 0.6%.
Beaten-up Greek stocks rose 2.1%. The moves come amid increased
attention on Greece's financial situation. Greek Prime Minister
Alexis Tsipras is expected to meet with German Chancellor Angela
Merkel at a summit in Brussels on Thursday, ahead of a Friday
meeting of eurozone finance ministers. Still, a deal on fresh aid
is unlikely to be reached before the Eurogroup meets on May 11, a
day before Greece must pay EUR780 million ($838 million) due to the
International Monetary Fund.
Japanese stocks gained, pushing the Nikkei Stock Average to
close above 20000 for the first time since 2000.
In economic news, existing-home sales rose 6.1% in March from
February to an annual rate of 5.19 million, reaching the highest
level in 18 months. Economists surveyed by The Wall Street Journal
had expected March sales to rise to a rate of 5.03 million.
Josie Cox contributed to this article.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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