VOL. 38 | NO. 45 | Friday, November 7, 2014
Stocks eke out small gain to close at record
NEW YORK (AP) — The stock market eked out another all-time high on Tuesday, but the gains were slight as investors awaited more news to give them an indication about the strength of the economy.
Homebuilders got a lift after D.R. Horton reported a surge in net orders for the fourth quarter, the second encouraging report from the sector in as many days after Toll Brother reported strong revenue growth Monday. Juniper Networks slumped after the sudden departure of its CEO.
The stock market's climb to record levels is being underpinned by record corporate earnings. As the reporting period for the third quarter winds down, companies have again managed to post strong earnings, allaying investors' concern that slowing growth elsewhere in the world would crimp profits.
"The strengthening economy is definitely there in the earnings," said Jerry Braakman, chief investment officer of First American Trust.
The Standard & Poor's 500 index rose 1.42 points, or 0.1 percent, to 2,039.68. The Dow Jones industrial average climbed 1.16 points, or less than 0.1 percent, to 17,614.90. The Nasdaq composite climbed 8.94, or 0.2 percent, to 4,660.56.
Ninety percent of companies in the S&P 500 have reported their results for the third quarter. Average earnings for companies in the index are now projected to have risen 8.9 percent in the period, according to analysts at S&P Capital IQ. At the start of last month earnings were forecast to grow only 6.7 percent.
Stocks will likely move "sideways to up" for the remainder of the year, said James Liu, Global Market Strategist at J.P. Morgan Funds. Earnings "continue to look good," he said.
While earnings remain strong, the market could face volatility as investors fret about the potential timing of the Federal Reserve's first increase in interest rates since 2006. "That's my largest area of concern," Liu said.
Fed policy makers have ended their most recent bond-buying stimulus program in October and have said that they will keep interest rates low until they are more certain about the economic recovery.
On Tuesday, D.R. Horton was among the day's gainers after the company said that net orders surged 48 percent in its fourth fiscal quarter. The company's stock climbed 52 cents, or 2.2 percent, to $23.95. Other home builders including PulteGroup and Lennar also rose.
Home builders also gained Monday after luxury home builder Toll Brothers said its revenue rose 29 percent in the most recent quarter and average sales prices climbed.
Zoetis, a maker of animal health medicines, surged after reports that activist investor William Ackman had taken a $2 billion stake in the company. The Wall Street Journal reported that Ackman's Pershing Square Capital Management had built the stake together with fellow hedge fund Sachem Head Capital Management. Zoetis rose $3.56, or 9 percent, to $43.72.
Juniper Networks slumped $1.22, or 5.7 percent, to 20.28 after announcing that CEO Shaygan Kheradpir had left the company after less than a year. The company said in a press release that his resignation "follows a review by the board of directors of his leadership and his conduct in connection with a particular negotiation with a customer."
In energy trading, the price of U.S. oil rose Tuesday on expectations of lower domestic supplies but global oil fell to a 4-year low as Libyan production and exports appear closer to reaching the market.
Benchmark U.S. crude rose 54 cents to close at $77.94 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 67 cents to close at $81.67 on the ICE Futures exchange in London.
The dollar rose 0.5 percent to 115.47 yen. The U.S currency weakened against the euro, declining to $1.2476. U.S. government bond trading was closed for Veterans Day.
The price of gold edged up $3.20 to $1,163 an ounce. Silver rose less than a penny to $15.68 an ounce and copper rose a penny to $3.03 a pound.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale gasoline rose 0.3 cent to close at $2.104 a gallon.
— Heating oil closed unchanged at $2.469 a gallon.
— Natural gas fell 0.8 cent to close at $4.247 per 1,000 cubic feet.