Stocks edged up on Monday after hitting record highs in the previous
session, as better-than-expected earnings from Citigroup were offset
by mixed U.S. economic data.
Shares of Citigroup (C.N) advanced 0.7 percent to $51.18 after the
third-largest U.S. bank by assets reported a 26 percent increase in
adjusted quarterly profit. The S&P 500 financial industry sector index
.SPSY was up 0.1 percent.
Leap Wireless International Inc (LEAP.O) more than doubled after AT&T
Inc (T.N) said on Friday it would buy the company for $1.19 billion
and at least two brokerages raised their ratings on Leap's stock. The
stock was trading at $16.82 - up 110.8 percent. It was the most active
on the Nasdaq.
The broader market's activity was muted with the three major U.S.
stock indexes managing only modest gains. The day's economic data sent
mixed signals, with growth in New York state manufacturing for July
accelerating while June retail sales fell short of expectations and
May business inventories barely increased.
"There aren't many sellers in the market, but there's a sense that
with earnings coming up, everyone is lined up waiting for the gun to
go off," said Wayne Kaufman, chief market analyst at Rockwell
Securities in New York.
"Retail sales were disappointing, but Citigroup had good news. But
that news was largely expected."
Analysts expect S&P 500 companies' second-quarter earnings to have
grown 2.8 percent from a year earlier, with revenue up 1.5 percent,
data from Thomson Reuters showed. Cintas Corp (CTAS.O) is expected to
report after the close.
S&P 500 industrial shares rose, as airlines over the weekend expressed
confidence in the safety of Boeing's (BA.N) 787 Dreamliner following a
fire on one of the jets last week. Boeing gained 3 percent to $104.88.
The Dow Jones Industrial Average .DJI was up 9.48 points, or 0.06
percent, at 15,473.78. The Standard & Poor's 500 Index .SPX was up
1.80 points, or 0.11 percent, at 1,681.99. The Nasdaq Composite Index
.IXIC was up 4.57 points, or 0.13 percent, at 3,604.65.
Both the Dow Jones industrial average and the S&P 500 ended Friday's
session at record closing highs, though the point and percentage gains
for the day were slim.
Bank of America-Merrill Lynch raised its year-end target for the S&P
500 to 1,750 from 1,600, citing expected earnings growth.
Over the past three weeks, the benchmark S&P 500 has erased losses of
nearly 6 percent from the selloff triggered in late May by Federal
Reserve Chairman Ben Bernanke, when he first raised the prospect of
trimming the Fed's $85 billion in monthly bond purchases. Since then,
Bernanke and other Fed officials have reassured investors that the
central bank will keep monetary policy loose for some time.
Qualcomm Inc (QCOM.O) was the biggest drag on the S&P 500. The mobile
chipmaker's stock slid 1.5 percent to $61.12 after Lazard Capital
Markets cut its rating to "neutral" from "buy."
Alexion Pharmaceuticals (ALXN.O) fell 4.5 percent to $109.07 on news
that it was being eyed for a potential bid by Swiss drugmaker Roche
Holding AG (ROG.VX), a transaction that could be the largest
healthcare deal of the year.
First Solar Inc (FSLR.O) was the S&P 500's best performer, jumping 6.1
percent to $50.55.
(Reporting by Alison Griswold; Additional reporting by Ryan
Vlastelica; Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)
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