Stocks waver amid mixed signals on the economy
Investors are still building on a stock market rally even when the news isn’t all great.
Stocks edged higher Monday after zigzagging in subdued trading on mixed economic and corporate earnings reports.
The Dow Jones industrial average rose only 15 points. But modest moves in indicators belie larger forces at work: Investors aren’t dumping stocks, even in the face of downbeat news.
Disappointing earnings from Verizon Communications, Aetna and Corning kept the market’s gains in check, adding another pause to a powerful rally that has sent major indexes rocketing 11% in just two weeks.
RadioShack reported higher second-quarter earnings that beat forecasts, but mainly from cost-cutting -- a theme that has become familiar this earnings season and has left many investors disappointed.
Stocks are steady in part because many investors aren’t retreating for fear of missing another rally.
On the plus side Monday, a government report showed that new-home sales posted the fastest increase in June in more than eight years as buyers jumped on reduced prices, low interest rates and a federal tax credit for first-time homeowners. That sent stocks of home builders surging.
Analysts said the market’s modest overall moves were a good sign. Brian F. Reynolds, chief market strategist at WJB Capital Group, said investors were surprised by the strength of corporate earnings reports in the last two weeks.
The Dow rose 15.27, or 0.2%, to 9,108.51, its first finish above the 9,100 mark since Nov. 5. The blue chips crossed zero 27 times during trading but spent almost the entire day with a loss.
The Dow has been up 10 of the last 11 trading days.
The broader Standard & Poor’s 500 index rose 2.92, or 0.3%, to 982.18, while the Nasdaq composite index rose 1.93, or 0.1%, to 1,967.89.
About two stocks rose for every one that fell on the New York Stock Exchange.
Bond prices fell, pushing yields higher, as a busy week of Treasury auctions got underway. The yield on the benchmark 10-year Treasury note rose to 3.71%.
The Commerce Department said new-home sales rose 11% in June to 384,000, beating analysts’ estimates.
In other market highlights:
* Verizon’s second-quarter earnings fell 21% as cost reductions at the nation’s largest wireless carrier failed to keep pace with falling revenue. Verizon said it would cut more than 8,000 jobs by year’s end. Shares fell 50 cents, or 1.59%, to $31.
* Aetna’s profit skidded 28% on higher medical expenses in its commercial business, and the health insurer cut its profit forecast for the second time in two months. The stock fell 72 cents, or 2.7%, to $25.72.
* Corning said its second-quarter earnings tumbled from results inflated by a big one-time gain a year ago. The stock fell 50 cents, or 2.9%, to $16.50.
* RadioShack fell $1.06, or 6.6%, to $15 after cost-cutting drove profit growth and sales missed analysts’ expectations.
The dollar was mixed against other major currencies, while gold prices rose.
Crude oil rose 33 cents to $68.38 a barrel on the New York Mercantile Exchange.
The Russell 2,000 index of smaller companies rose 2.42, or 0.4%, to 550.88.
Britain’s FTSE 100 rose 0.2%, Germany’s DAX index rose 0.4%, and France’s CAC-40 rose 0.2%. Japan’s Nikkei stock average rose 1.5%.
