U.S. Stocks Get a Boost from Strong Corporate Results
By Georgi Kantchev
U.S. stocks edged higher on Monday as companies that reported strong corporate earnings helped push major indexes higher.
The Dow Jones Industrial Average gained 155 points, or 0.7%, to 24519 in early-morning trading. The S&P 500 added 0.5%, while the Nasdaq Composite rose 0.2%.
The start of the latest earnings season contributed to the gains major indexes accrued early Monday morning. Shares of trucking company J.B. Hunt Transport Services were among the biggest gainers in the S&P 500 after it reported stronger-than-expected revenue for the first quarter of the year, leading the broad index's industrial sector higher.
J.B. Hunt shares climbed 4.5%, while the broader industrial segment of the S&P 500 added 0.8%.
However, while companies are expected to broadly report gains in profit and revenue for the first three months of the year, some investors worry that stocks will have a muted response since valuations are still relatively high, even after the recent pullback helped pull down forward-earning multiples for the S&P 500. Meanwhile, the labor market is tight, which could nudge inflation to grow more quickly than expected and resource costs could soon become problematic, said Jim Paulsen, chief investment strategist of the Leuthold Group.
Shares of Bank of America, for example, added only 0.1% after the bank said Monday that a boost from the U.S. tax law and continued rising interest rates helped push first-quarter profit higher, mirroring the weak performance among financial stocks that had reported strong earnings on Friday.
"For a host of reasons, investors should probably moderate upside expectations due to robust earnings results this year," Mr. Paulsen said.
Investors breathed a sigh of relief after missile strikes late Friday by the U.S., U.K. and France on Syria didn't lead to a major escalation in the seven-year-old conflict. A Pentagon official said that the single wave of strikes is complete for now, while in a Twitter post Saturday, President Donald Trump said "Mission Accomplished!"
"Uncertainties can escalate again, but so far the biggest fears haven't been realized, which allows risky assets to recover," said Viraj Patel, a strategist at ING Bank.
Geopolitical concerns, trade tensions and some weaker-than-expected economic numbers rattled investor sentiment in recent weeks amid fears those factors could hit a rare spurt of synchronized global economic upswing.
Elsewhere, the Stoxx Europe 600 fell 0.4%, dragged down by energy stocks, while Asian markets ended mixed.
Asian stocks' early gains eroded Monday, led by declines in Hong Kong and mainland China over worries about the Hong Kong dollar, though Japanese stocks rose.
The Hang Seng Index ended down 1.6% while the Shanghai Composite Index of big-cap Chinese stocks was down 1.5%. Japan's Nikkei Stock Average finished up 0.3%.
--Michael Wursthorn contributed to this article.
Write to Georgi Kantchev at [email protected]