Saturday, October 19, 2013
DJ: S&P 500 Ends At New Record
NEW YORK--U.S. stocks rose, pushing the S&P 500 to a record, as quarterly profits from Google, General Electric and some other large companies topped expectations.
The index climbed 11.35 points, or 0.7%, to 1744.50. It posted a 2.4% weekly gain, the biggest since mid-July, bolstered by Wednesday's last-minute deal to reopen the U.S. government and extend the country's borrowing limit.
Stocks had taken a hit in early October as the latest political drama in Washington forced a partial closure of the federal government and raised the threat of a U.S. debt default. While traders said there was little widespread selling, many investors pulled over to the sidelines.
But with a deal reached, and Washington on the back burner, investors resumed the push into the stock market, even amid generally mixed earnings news.
"We saw people locking in gains, we saw people paring their exposure to equities, we saw the winners and high-momentum stuff being sold," said Jonah Cave, head of client trading and execution in the Americas at UBS AG. "After the deal, we then saw a swift reversal of that. It feels to me like we're just going to continue on an extended march forward as broad participation moves back into equities."
The Nasdaq Composite Index rose 51.13 points, or 1.3%, to 3914.28 Friday. The Dow Jones Industrial Average lagged behind, rising 28.00 points, or 0.2%, to 15399.65. Google's shares jumped, topping $1,000 for the first time, after the company reported earnings and revenue that exceeded analysts' estimates. Google countered lower advertising rates on mobile phones by selling a higher volume of ads.
GE surged to a five-year high. The company reported earnings that beat expectations, although revenue missed slightly, as strength in its industrial businesses helped offset weakness in its financial unit.
Chipotle Mexican Grill and Morgan Stanley rose after both companies reported better-than-expected quarterly revenue.
International Business Machines, which has a disproportionate impact on the Dow because of how the index is calculated, dropped 0.6% after reporting quarterly revenue that missed analysts' projections.
Analysts expect that S&P 500 companies' quarterly profits rose 1.3% from a year earlier, including actual results from the nearly one-fifth of the group that has already reported, according to FactSet.
Investors are looking ahead to the September employment report due on Tuesday, which saw its scheduled Oct. 2 release postponed due to the shutdown. The interruption in labor-market data stoked speculation the Federal Reserve won't dial back its monetary stimulus anytime soon. U.S. central bankers have said they are waiting for better employment data before scaling back their bond-buying program, widely believed to have boosted stocks and suppressed interest rates.
Price gains in Treasury bonds petered out Friday, but the bond market still posted a weekly rally driven by expectations the Fed would remain in play. The benchmark 10-year note closed the session 1/32 lower Friday, yielding 2.589%
European markets gained ground, with the Stoxx Europe 600 rising 0.8% to the highest level since June 2008.
Asian markets were also mostly higher after data showing China's third-quarter gross domestic product expanded at a 7.8% pace, accelerating from 7.5% growth in the second quarter, and in line with expectations. That means the world's second-largest economy is likely to meet or exceed the government's 7.5% growth target for 2013. China's Shanghai Composite Index rose 0.2%.
November crude-oil futures gained 0.1% to settle at $100.81 a barrel, after finishing at a 3 1/2-month low on Thursday. Meanwhile, October gold futures slipped 0.6% to settle at $1,314.40 an ounce.