Tech firms drive US stock indexes to new highs
By Alex Veiga
Gains in technology companies helped lift U.S. stock index higher Monday, nudging the market once again into record territory.
The Standard & Poor’s 500 index closed at an all-time high, as did the Dow Jones industrial average. The latest gain extended the Dow’s winning streak to 10 days.
Traders bid up shares in microchip makers and other technology companies. Grocery chains, drugstore operators and other consumer-focused companies also helped drive the market higher. Energy companies declined the most along with the price of crude oil. Banks and industrial companies also lagged.
Investors were mostly focused on the latest company earnings and deal news.
“Earnings have been strong, particularly revenue growth has come in stronger than initial estimates,” said Quincy Krosby, chief market strategist at Prudential Financial. “And overall the guidance has been strong.”
The S&P 500 index rose 4.08 points, or 0.2 percent, to 2,480.91. The Dow gained 25.61 points, or 0.1 percent, to 22,118.42. The Nasdaq composite added 32.21 points, or 0.5 percent, to 6,383.77. The Russell 2000 index of smaller-company stocks picked up 1.85 points, or 0.1 percent, to 1,414.17.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.26 percent from 2.27 percent late Friday.
Positive economic data and strong company earnings have helped nudge the stock market mostly higher in recent weeks.
Heading into Monday, about 82 percent of S&P 500 companies had reported quarterly results, with roughly 52 percent having posted better-than-expected earnings and revenue, according to S&P Global Market Intelligence. Of those, technology companies led all others with 73 percent of the sector’s results beating Wall Street’s expectations.
Investors have welcomed the positive earnings growth, pushing the market further into record territory, fueling speculation about how high the market can go before there is a pullback.
“What you want to see is a broad range of stocks pushing the market higher, and what we’re seeing are fewer stocks pushing the market higher,” Krosby said. “That’s not necessarily a prescription for a major pullback, but it’s something to watch. Statistically, August and September tend to be the least-hospitable period for the market.”
Technology companies lead the market’s gainers Monday. Lam Research rose $5.79, or 3.9 percent, to $155.84. KLA-Tencor rose $3.18, or 3.6 percent, to $92.01.
Energy stocks were on the other end of the spectrum. Pioneer Natural Resources fell $5.70, or 4.2 percent, to $129.64, while Newfield Exploration lost $1.39, or 5 percent, to $26.44.
Traders also continued to bid up shares in companies whose earnings topped analysts’ forecasts.
Tyson Foods climbed $3.60, or 5.7 percent, to $66.90. The meat processor’s forecasts also pleased investors. ON Semiconductor jumped $1.23, or 8.1 percent, to $16.33.
Some companies’ results disappointed the market.
Armstrong Flooring slumped 17.5 percent after the company’s latest quarterly results fell well short of analysts’ forecasts. The stock slid $3.03 to $14.25.
The market welcomed the proposed combination of NxStage Medical and Germany’s Fresenius Medical Care AG & Co. NxStage, a medical device company, agreed to be acquired by Fresenius for $30 a share in a cash deal valued at about $2 billion. NxStage shares vaulted $6.53, or 28.2 percent, to $29.67.
Oil prices fell. Benchmark U.S. crude fell 19 cents, or 0.4 percent, to $49.39 per barrel in New York. Brent crude, the international standard, lost 5 cents, or 0.1 percent, to $52.37 a barrel in London.
In other energy futures trading, wholesale gasoline dipped 2 cents to $1.63 a gallon. Heating oil fell 1 cent to $1.64 a gallon. Natural gas gained 3 cents to $2.80 per 1,000 cubic feet.
Gold added 10 cents to $1,264.70 an ounce. Silver held steady at $16.25 an ounce. Copper rose 2 cents to $2.91 a pound.
The U.S. dollar climbed to 110.72 from 110.67 yen on Friday. It weakened against the euro, which rose to $1.1793 from $1.1769. The euro was below $1.06 as recently as April, before the dollar began weakening steadily.
Markets in Europe were mixed. Germany’s DAX fell 0.3 percent, while France’s CAC 40 rose 0.1 percent. The FTSE 100 in Britain edged 0.3 percent higher. Earlier in Asia, Hong Kong’s Hang Seng index added 0.5 percent, while South Korea’s Kospi rose 0.1 percent.