New York (CNNMoney)
Investors took a wait-and-see approach Monday as the
corporate earnings season gets underway in earnest this week.
The S&P 500 gained 0.2%, squeaking past its record high by
one point. The Dow Jones
industrial average inched up nearly 2 points. The Nasdaq added 0.3%.
All three indexes are up roughly
19% so far this year.
Nearly 160 companies in the
S&P 500 are slated to report quarterly results this week. Among the Dow
components on deck are AT&T (T, Fortune 500), Boeing (BA, Fortune 500), and 3M (MMM,Fortune 500).
Broad boost from earnings: While
it's still early, second-quarter earnings have come in better than many had
feared.
The results so far "have
provided support to stock prices and given a boost to investor sentiment,"
said John Stoltzfus, chief investment strategist at Oppenheimer Asset
Management, adding that expectations had been cut in the run-up to the reports.
Of the 104 S&P 500 companies
that reported results through Friday, 66% have beat analysts' expectations,
according to S&P Capital IQ.
Much of that performance was
driven by the financial services sector, which benefited from robust capital
market activity in the second quarter.
McDonald's (MCD, Fortune 500) said Monday that global sales and earnings rose in
the second quarter, but profits fell short of analysts' expectations. The fast
food chain also warned that sales will be "challenged" in the second
half of the year. McDonald's was the biggest drag on the Dow Monday.
Kimberly-Clark (KMB, Fortune 500), producer of Kleenex, Huggies, Kotex, Depends and Scott
products, reported an increase in quarterly profit but sales were flat.
Six Flags (SIX) shares fell after the amusement park operator said
earnings slumped 26% in the second quarter. The company is also struggling with
the fallout from a fatal roller coaster accident over the
weekend.
Tech results in focus: This
week, a number of big technology companies are slated to report, including Apple (AAPL, Fortune 500), Facebook (FB) and Amazon (AMZN,Fortune 500).
Following disappointing results
from Google (GOOG, Fortune 500) and Microsoft(MSFT, Fortune 500)last week, investors
are eager to see how other tech companies have fared. Apple, which can have an
out-sized impact on the broader market, is expected to report a sharp drop in profits.
After the market closed Monday, Netflix's (NFLX) reported earnings of 49 cents per share, topping
analysts' expectations. But the wide-ranging earnings guidance spooked
investors a little in after-hours trading.
Despite the positive tone to last
week's earnings reports, many investors remain concerned about the tepid pace
of revenue growth, said Dan Greenhaus, chief market strategist at BTIG.
"Revenue growth concerns are
paramount, with some wondering about the future path of earnings if revenue
growth doesn't accelerate," Greenhaus wrote in a note to clients.
He said about half of the
companies that have reported so far have beat revenue expectations. While that
sounds pretty good, it's below average.
In other corporate news, Yahoo! (YHOO, Fortune 500)announced that it will repurchase 40 million Yahoo shares from long-time backer
Third Point Capital. The hedge fund, run by activist investor Dan Loeb, will
retain a small stake.
UBS (UBS) agreed to pay about $745 million to settle a case with the U.S. Federal
Housing Finance Agency over improperly selling mortgage-backed securities to
Fannie Mae and Freddie Mac in the United States.
Gold spike, housing slump: Shares
of mining companies were higher as the price of gold rose more than 2% to trade
above $1,300 an ounce.
Barrick Gold (ABX), Newmont Mining (NEM, Fortune 500), Kinross Gold (KGC) all gained about 4%.
In economic news, the National
Association of Realtors said new
home sales fell 1.2% in June. The group blamed higher mortgage
rates in certain high-end markets.
Shares of homebuilders were under
pressure. Hovnanian (HOV), D.R. Horton (DHI)and Lennar (LEN) all fell about 2%.
World markets: In
Europe, the major indexes ended
narrowly mixed.
Asian markets also closed out the day in mixed territory.
Japan's Nikkei advanced
by 0.5% after voters rewarded the architects of Abenomics with a sweeping electoral victory.
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here to read the original article by Ben Rooney on CNNMoney.com