Wall St sees gains for the fourth day
THE S&P 500 closed at a five-month high for the third day on yesterday but had difficulty extending gains in the face of lackluster economic data and another European bond market test.
Energy shares curbed gains after Chevron, the second-largest US oil company, said fourth-quarter profit would be far below the previous quarter. Chevron slid 2.6 per cent to $104.97, making it the biggest drag on the Dow, while the S&P energy index fell 0.9 per cent and was the biggest decliner among S&P sectors.
In its fourth day of gains, the S&P 500 has risen 1.4 per cent, but it’s added only 0.3 per cent since Tuesday as investors look for more convincing evidence of an improving US economy, solid corporate earnings and progress toward resolving the Eurozone’s debt crisis.
Analysts also pointed to technical resistance near the 1,300 level.
“We may be stuck in neutral because you have two very strong forces opposing one another. You have fundamentals that are not particularly fantastic at the present moment, with a market that wants to project out a year or so and do a little bit better,” said Doreen Mogavero, chief executive of Mogavero, Lee & Co.
“The divergence of opinions on where this market is going is balancing us out and we are sort of stuck.”
The Dow Jones industrial average gained 0.17 per cent to 12,471.02 while Standard & Poor’s 500 Index rose 0.23 per cent to 1,295.50. The Nasdaq Composite Index rose 0.51 per cent to 2,724.70.
Investors will look to earnings from JPMorgan Chase & Co, the first of the major US banks to report earnings, today for signs the banking sector’s recent gains are justified. The KBW Bank Index is up nearly 11 per cent for the year.
“You need three groups to really push this market through – you need the financials, you need technology and you need energy,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
On the eurozone front, Spanish and Italian government bond yields fell as solid auctions for government debt in the two countries were an encouraging sign for investors, who will be braced for another Italian bond sale today.
But US retail sales rose at the weakest pace in seven months last month and first-time claims for jobless benefits moved higher last week, denting optimism about the US recovery after a string of upbeat economic data.