Wall Street pauses before start of earnings news
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NEW YORK |
(Reuters) - The S&P 500 paused near a seven-week high on low volume on Wednesday before the start of earnings reports next week, which investors hoped would provide the catalyst for stocks to advance.Signs of a strengthening economy plus merger and acquisition activity have pushed the S&P 500 close to 1,344, the highest level since June 2008. A meaningful breach of that level could lead to a stocks breakout, pushing prices higher.
The market is "basically poised and waiting to see if these (earnings ) numbers will support the upside," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco. "It's a consolidation week."
Pado said that earnings could push the S&P 500 to 1,385 by early May.
Stocks got another lift from the president of the Atlanta Fed, Dennis Lockhart, who said the Fed will complete its $600 billion bond-buying plan as scheduled at the end of June. He said he does not see any reason to end the program early.
The Dow industrials hit their highest intraday level since 2008 but gains were capped in what was set to be another low volume day.
The Dow Jones industrial average .DJI gained 18.73 points, or 0.15 percent, to 12,412.63. The Standard & Poor's 500 Index .SPX dropped 0.12 points, or 0.01 percent, to 1,332.51. The Nasdaq Composite Index .IXIC fell 0.57 points, or 0.02 percent, to 2,790.62.
The Dow was supported by Cisco Systems Inc (CSCO.O), which rose 4.3 percent to $17.95 the day after chief executive John Chambers suggested that the networking giant might change operations.
The percentage of U.S. stock market bulls rose to the highest level in nearly four months as equities continue to recover from their recent fall, according to a weekly survey of advisers by Investors Intelligence.
Bullish advisers rose to 57.3 percent in the latest week, compared with 51.6 percent in the previous week and a recent low of 50.6 percent just before that. The reading was the highest since the middle of December, when it hit 58.8 percent.
Broadcom Corp (BRCM.O) shares gained 3.1 percent to $39.62 after Oppenheimer raised its rating on the chipmaker's stock and set a price target of $55.
In earnings news, global agribusiness Monsanto Co. (MON.N) said net income jumped about 15 percent in the second quarter on strong sales of corn seed for spring planting and improved profit margins.
But its stock fell 4.5 percent to $70 after the world's largest seed company did not raise its full-year outlook.
Purchases of major items sent German industrial orders soaring above expectations in February, data showed on Wednesday, in a further sign Europe's largest economy was outshining its neighbors.
(Reporting by Ed Krudy; Editing by Kenneth Barry)
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