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Stocks Cap Shortened Week With Gains 04/18 16:04
The major U.S. stock indexes capped a holiday shortened week with slight
gains Thursday, reversing some of the modest losses from a day earlier.
(AP) -- The major U.S. stock indexes capped a holiday shortened week with
slight gains Thursday, reversing some of the modest losses from a day earlier.
The marginal upward move was not enough to keep the benchmark S&P 500 index
from snapping a string of three straight weekly gains.
Industrial sector stocks paved the way higher as traders welcomed solid
earnings from Snap-on, Honeywell International, United Rentals and Union
Pacific. Technology companies also notched solid gains, offsetting losses by
financial and energy stocks.
Traders gave a strong reception to Pinterest and Zoom Video Communications,
two technology companies that made their widely anticipated stock market
debuts. Cigarette makers fell on news that the U.S. Senate's majority leader
plans to introduce legislation to raise the minimum age to buy tobacco products
from 18 to 21.
Investors remain focused on company earnings as they look for clues about
the health of the U.S. economy and the prospects for better corporate profits,
a key driver of stock market gains. Analysts expect the wave of first quarter
results for S&P 500 companies being reported over the next few weeks will be
the weakest in nearly three years.
"The big takeaway over the past week is the U.S. is doing OK and (company)
outlooks are initially reasonable," said Ben Phillips, chief investment officer
at EventShares.
The S&P 500 gained 4.58 points, or 0.2%, to 2,905.03.
The Dow Jones Industrial Average rose 110 points, or 0.4%, to 26,559.54. The
Nasdaq composite inched 1.98 points higher, or less than 0.1%, to 7,998.06.
The Russell 2000 index of small-cap dropped 1.85 points, or 0.1%, to
1,565.75.
Major European stock indexes finished mostly higher.
Bond prices rose. The yield on the 10 year Treasury fell to 2.56% from 2.59%
late Wednesday.
The U.S. stock indexes struggled to maintain momentum for much of the day
before locking in slight gains by the end of the day.
The market has been charting an uneven course all week as traders wade
through company earnings reports.
Even so, stocks are still holding on to blockbuster gains after rebounding
from a steep sell-off late last year. The S&P 500 remains within 1% of its most
recent all-time high on September 20.
The Federal Reserve helped spur the market's rebound early this year when it
said that it may not raise interest rates at all in 2019.
Still, investors are looking at company earnings as they divine which
direction the stocks will churn next.
"We haven't really gotten to the meat of earnings season and (investors)
want to see some really positive guidance and they want to make sure earnings
are growing," said Karyn Cavanaugh, senior markets strategist at Voya
Investment Management. "We have a high bar to jump over from last year, because
in the first quarter we had that one-time tax bump."
Several industrial sector stocks surged after reporting solid quarterly
results Thursday.
Snap-On climbed 6.5% after the tool and diagnostic equipment maker's first
quarter profit beat forecasts and it reported growth in its U.S. franchise
network.
Union Pacific gained 4.4% after the railroad's first quarter profit climbed
6% even though the company hauled 2% fewer carloads and dealt with massive
flooding. Union Pacific's earnings topped analysts' estimates, though its
revenue declined, falling short of analysts' forecasts.
United Rentals surged 8.1% after the construction equipment rental company's
first quarter results beat Wall Street's expectations.
Honeywell International picked up 3.8% after its first quarter earnings
topped analysts' forecasts thanks to a strong sales growth in aerospace,
building technologies and other lines of business. The company also raised its
earnings guidance for the year.
Results from other companies left traders wanting.
Skechers USA tumbled 10.4% after the footwear company's first quarter result
fell short of Wall Street's forecasts. The company also issued second quarter
guidance that came in below analysts' estimates.
KeyCorp fell 2.2% after the bank's latest quarterly snapshot missed
analysts' targets as income from fees declined.
Shares in cigarette makers fell after Senate Majority Leader Mitch McConnell
said he plans to introduce legislation to raise the minimum age to buy tobacco
products from 18 to 21 nationally.
The Senate leader said his bill will cover all tobacco products, including
vaping devices, and will continue to hold retailers responsible for verifying
the age of anyone buying tobacco products. About a dozen states have already
enacted laws raising the minimum legal age to 21.
Altria Group fell 3.2% and Philip Morris International dropped 1.2%.
Pinterest and Zoom surged in their first day of trading. Pinterest, which
lets users share images of crafts and other projects, jumped 28.4% from its IPO
pricing of $19. Zoom, a maker of video conference technology, vaulted 72.2%
from its IPO pricing of $36.
The San Francisco-based companies' market debuts came less than a month
after ride-hailing service Lyft began trading. In what might be a cautionary
tale for other anticipated tech IPOs, Lyft shares surged on their first day but
have since plunged back below their original offering price.
The market also got a boost from positive economic data on U.S. retail sales
and unemployment claims.
The Commerce Department said retail sales surged in March at the fastest
pace since late 2017, driven by increased spending on autos, gasoline,
furniture and clothing. The gains are a sign that the healthy job market has
likely made consumers more eager to spend in ways that boost overall economic
growth.
Meanwhile, the Labor Department said weekly applications for unemployment
aid declined last week.
"Let's face it, the consumer is the driving force of the U.S. economy, and
when you get good initial jobless claims and good retail sales it just confirms
the fact that the consumer is very strong, and that's what's giving investors a
little bit of comfort," Cavanaugh said.
U.S. stock markets are closing Friday in observance of the Good Friday
holiday.
Energy futures finished mostly higher Thursday. Benchmark U.S. crude oil
rose 0.4% to settle at $64 per barrel. Brent crude, the international standard,
added 0.5% lower to close at $71.97 per barrel.
Wholesale gasoline gained 1.5% to $2.07 per gallon, while heating oil inched
0.1% higher to $2.07 per gallon. Natural gas fell 1.1% to $2.49 per 1,000 cubic
feet.
Gold slipped 0.1% to $1,276 per ounce, silver rose 0.1% to $14.96 per ounce
and copper fell 1.6% to $2.92 per pound.
The dollar fell to 111.93 Japanese yen from 112.07 yen late Wednesday. The
euro weakened to $1.1230 from $1.1298.
(BAS)
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