By Saumya Vaishampayan
U.S. stocks rose for the second session in a row Monday, boosted
by better-than-expected earnings reports and gains in European and
Chinese shares.
The Dow Jones Industrial Average added 74 points, or 0.4%, to
18098. The S&P 500 gained nine points, or 0.4%, to 2117, and
the Nasdaq Composite rose 23 points, or 0.5%, to 5028.
Monday's gains were broad-based, with eight of the S&P 500's
10 sectors in positive territory. Utilities stocks rose the most,
up 1.2%, followed by a 0.9% gain in health-care stocks.
"This is carry through" from Friday, said J.T. Cacciabaudo,
global head of equity sales trading at Sterne Agee CRT. 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.
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.
Last week's Federal Reserve statement, which didn't signal any
shift in its policy stance, paved the way for a rebound in stocks,
said Sterne Agee CRT's Mr. Cacciabaudo. "People like certainty
versus uncertainty," he said.
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 1.6% and France's CAC 40
rose 0.9%.
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 Chris Gaffney, president 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%.
Factory orders rose 2.1% in March, the Commerce Department said
Monday. The gain follows seven straight monthly decreases.
Economists surveyed by The Wall Street Journal had expected orders
to rise 1.9% in March.
Investors 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 1.2%.
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 0.9%.
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 less than 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 0.5%.
Cisco Systems Inc. said Chuck Robbins would be its next chief
executive, effective July 26, replacing longtime leader John
Chambers. Shares added 0.3%.
In commodity markets, gold futures rose 1.4% to $1190.80 an
ounce. Crude-oil futures fell 0.9% to $58.62 a barrel.
The yield on the 10-year Treasury note inched down to 2.107%
from 2.119% on Friday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
Access Investor Kit for Comcast Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N1019
Access Investor Kit for Comcast Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US20030N2009
Access Investor Kit for The Dow Chemical Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2605431038
Access Investor Kit for Sysco Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8718291078
Access Investor Kit for Tyson Foods, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9024941034