Stocks edge higher as a market rally slows
11/11/2013NEW YORK — The Dow Jones industrial average held at a record high on Wall Street today.
The market continued its climb from Friday, when it got a lift from an unexpectedly strong U.S. jobs report. Stocks have surged to record highs this year as the Federal Reserve keeps up its economic stimulus and earnings at U.S. companies continue to grow.
The Fed is currently buying $85 billion of bonds every month and holding its benchmark interest rate close to zero to stimulate economic growth. The central bank’s program has helped support a surge in stocks during the last four and a half years. And even after big gains this year, many investors still see stocks as being more attractive than bonds.
The Dow rose 16 points, or 0.1 percent, to 15,777 as of 12:14 p.m. The index has gained 20 percent this year.
The Standard & Poor’s 500 index was flat at 1,770. The Nasdaq composite slipped three points, or less than 0.1 percent, to 3,916.
Stock trading was muted as bond markets were closed for Veterans Day. Traders on the floor of the New York Stock Exchange held a moment of silence in observance of the holiday.
Investors this week will look for evidence that Americans are ready to start spending for the holidays. Macy’s, Wal-Mart, Nordstrom and Kohl’s are scheduled to report their quarterly results.
About ninety percent of the companies in the S&P 500 have released their third-quarter earnings, and the majority beat the expectations of Wall Street analysts, according to data from S&P Capital IQ.
Earnings are forecast to grow by 5.6 percent in the July-to-September period, compared with 4.9 percent in the second quarter and 2.4 percent in the same period a year earlier.
Investors will be closely following the Senate Banking Committee’s confirmation hearing for Janet Yellen on Thursday. Yellen is set to succeed Federal Reserve Chairman Ben Bernanke, becoming the first woman to lead the U.S. central bank.
Yellen’s testimony “is coming at an important inflection point,” for financial markets, as the Fed considers pulling back on its stimulus, said Quincy Krosby, market strategist at Prudential Financial. “The market will be looking for any clues” about the Fed’s policy going forward, Krosby said.
The yield on the 10-year Treasury note jumped last week to 2.75 percent, the highest in six weeks, after the government reported last month’s surge in hiring.
In commodities trading, the price of oil rose 48 cents, or 0.5 percent, to $95.09 a barrel. The price of gold fell $3, or 0.2 percent, to $1,281.30 an ounce.
Among stocks making big moves:
— ViroPharma jumped $10, or 26 percent, to $49.42, after the company agreed to be acquired by drugmaker Shire PLC.
— Transocean rose $1.80, or 3.4 percent, to $55.27 after the company said it had agreed to a deal with billionaire investor and minority shareholder Carl Icahn after a months-long proxy fight. The company will pay a $3-a-share dividend and reduce the size of its board.
— Best Buy rose $1.38, or 3.3 percent, to $43.80 after an analyst at UBS lifted his rating on the stock to buy from neutral and raised his price target on the stock, in anticipation of better earnings from the retailer. Best Buy has risen 270 percent this year, making it the best performer in the S&P 500 index.