Markets

US stocks on track to bounce back from losing streak

S&P 500 companies’ profits estimated to have risen 10.4% in first quarter of 2017

US stocks rebounded from a weekly slide, while the dollar weakened as traders returned from a long weekend that failed to deliver major geopolitical events that threaten global growth. Photographer: Michael Nagle/Bloomberg

Thu Apr 20 2017 - 16:43

US stocks were on track to snap a three-day losing streak on Monday as investors turned their attention to the first-quarter earnings season, while geopolitical concerns took a back seat.

The latest earnings season is expected to show whether companies can live up to their lofty valuations, especially after a post-election rally.

Profits of S&P 500 companies are estimated to have risen 10.4 per cent in the latest quarter, the first double-digit percentage growth since the third quarter of 2014.

The influence of geopolitical risks, which had dominated market sentiment last week, seemed to be waning. “We got in and out of the long weekend without any major news or controversy on the geopolitical front,” said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.

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Better earnings

“The anticipation of better earnings from the first quarter may shift the momentum in the favour of this market at least in the near-term.”

At 12:47pm Eastern Time, the Dow Jones Industrial Average was up 112.67 points, or 0.55 per cent, at 20,565.92, the S&P 500 was up 12.33 points, or 0.53 per cent, at 2,341.28 and the Nasdaq Composite was up 32.46 points, or 0.56 per cent, at 5,837.61.

All of the 11 major S&P 500 sectors were higher, led by technology, which was up for the first time in 11 days.

Among stocks, Amazon. com was up 1.3 per cent at $896.79 after Credit Suisse raised its price target to $1050 from $900. The online retailer's shares also provided the biggest boost to the S&P and the Nasdaq.

Credit Suisse also raised its price target on Boeing, sending the aircraft maker's shares up 1.4 per cent.

Gainer

Netflix, which was scheduled to report results after the bell on Monday, was up 2.7 per cent at $146.75.

Arconic was the biggest percentage gainer on the S&P after chief executive Klaus Kleinfeld resigned amid pressure from activist hedge fund Elliott Management.

Advancing issues outnumbered decliners on the NYSE by 1,996 to 881. On the Nasdaq, 1,816 issues rose and 960 fell.

The S&P 500 index showed seven 52-week highs and no lows, while the Nasdaq recorded 22 highs and 38 lows.

– (Reuters)

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