Stocks edge up to new record highs

The New York Stock Exchange in Manhattan.

By Associated Press

May 8, 2017 3 PM PT

A turn higher in the last few minutes of trading was enough to nudge U.S. indexes to more record highs Monday as fear seemed to drain out of the market.

Trading was remarkably calm after the weekend’s presidential election in France, which had the potential to upset global markets. The winner was Emmanuel Macron, the candidate who favored keeping France in the European Union and in the euro currency — to the relief of investors who feared the alternative would have hurt global trade. His victory helped calm markets enough that an index used to measure the market’s fear level dropped to its lowest level since 1993.

The Standard & Poor’s 500 index drifted up and down through the day before ending at 2,399.38, up just 0.09 of a point. The Dow Jones industrial average similarly edged up a fraction, rising 5.34 points to 21,012.28.

The Nasdaq composite rose 1.90 points, or less than 0.1%, to 6,102.66. Small-company stocks fell, and the Russell 2000 index slid 5.36 points, or 0.4%, to 1,391.64.

Markets around the world have been tearing higher in recent weeks, due in part to excitement about the French election and strong earnings reports from U.S. companies.

“Corporate earnings have been phenomenal, the best quarter in five years,” said Phil Orlando, chief equity strategist at Federated Investors. “The earnings recession that was about seven or eight quarter long is definitively behind us. It’s over.”

More than 80% of companies in the S&P 500 have reported their results for the first three months of the year, and most have topped analysts’ expectations. With the U.S. job market and economies around the world continuing to improve, Orlando says he expects profits to keep rising through the year.

Market critics worry that stocks have grown too expensive relative to their profits, but not Orlando: He expects further gains.

“Everyone is starting to get a little more confident now,” he said.

Confidence has grown enough that on Monday, the VIX volatility index sank to its lowest level since 1993. The VIX measures how much investors are paying to protect themselves from upcoming swings in the S&P 500, and it has been on a general trend downward since shortly before the U.S.’ November election.

Newell Brands jumped 11.9% to $51.93, the largest gain in the S&P 500, after reporting stronger revenue and profit for its latest quarter than analysts expected. The company, whose brands include Paper Mate, Sharpie and Calphalon, also raised its earnings forecast for the year.

Kate Spade surged 8.3% to $18.38 after agreeing to a $2.4-billion buyout by Coach, its rival in the luxury goods market. Coach is to pay $18.50 a share for Kate Spade.

Often when companies announce takeovers, the purchaser’s stock will drop on worries that it paid too much or pursued an ill-fitting deal. But Coach rose 4.8% to $44.71.

Tribune Media jumped 5.2% to $42.40 after Sinclair Broadcast Group said it would buy its rival in a cash-and-stock deal valued at $43.50 a share, or a total of $3.9 billion. Sinclair fell 2.2% to $36.13.

Tyson Foods dropped 6.1%, to $59.48, after reporting weaker revenue and earnings for its latest quarter than analysts expected. The company said fires at two of its chicken plants hurt results.

Straight Path Communications rocketed 33% to $214.74 after the wireless spectrum licensing firm said it received a new offer worth $184 a share from a “multi-national telecommunications company.”

Kite Pharma dropped 13.2% to $70.99 after the Santa Monica biotech company posted disappointing earnings and disclosed the death of a patient in a safety study testing a cancer drug.

In markets abroad, the French CAC 40 fell 0.9%. But that follows a 7.4% surge in the preceding two weeks, when investors sent French stocks higher in anticipation that Macron would win the election. In Germany, the DAX slipped 0.2%. The FTSE 100 index in London was virtually flat.

Asian markets fared better. Japan’s Nikkei 225 index jumped 2.3%, as did South Korea’s Kospi index. The Hang Seng in Hong Kong rose 0.4%.

The euro had been climbing against the dollar in recent weeks as expectations built for a Macron victory. After Macron did win the election, the currency fell like the French stock index. The euro slipped to $1.0930 from $1.0990 late Friday. The dollar rose to 113.07 yen from 112.61 yen. The British pound slipped to $1.2943 from $1.2969.

Benchmark U.S. crude rose 21 cents to $46.43 a barrel. Brent crude, the standard for international oil prices, rose 24 cents to $49.34 a barrel.

Natural gas fell 9 cents to $3.17 per 1,000 cubic feet, heating oil rose 2 cents to $1.46 a gallon and wholesale gasoline rose a penny to $1.52 a gallon.

Gold rose 20 cents to $1,227.10 an ounce, silver fell 2 cents to $16.26 an ounce and copper fell 4 cents to $2.49 a pound.

Bond yields edged up. The yield on the 10-year Treasury rose to 2.38% from 2.35%. The two-year yield rose to 1.32% from 1.31%, and the 30-year Treasury yield rose to 3.03% from 2.99%.

UPDATES:

3 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 10 a.m.