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Wall Street ends higher as Dow edges to latest record

Published 08/07/2017, 04:38 PM
© Reuters. A trader works on the floor of the NYSE in New York
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By Sinead Carew

NEW YORK (Reuters) - The Dow edged up to its ninth record closing high in a row while the S&P ended slightly higher on Monday, with consumer and technology sector gains offsetting losses in energy.

Yet trading volume was relatively light as investors had little reason to make big bets with the U.S. Congress and President Donald Trump on vacation and a stronger-than-expected earnings season drawing to a close.

"Today there's a lack of conviction either way. There's no reason to be a seller yet and there's no reason to be a buyer at these levels as earnings season winds down and you don't have much in the way of economic news this week," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

Some investors were looking into underperforming sectors, including retail, anticipating a lift from in-store back-to-school shopping, according to Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"What you're really seeing is very minor sector rotation," said Meckler.

Robust second-quarter earnings have boosted the broader market in recent weeks and a strong July employment report on Friday added to positive sentiment.

Analysts, on average, expect S&P 500 earnings to have expanded 12 percent in the second quarter and project earnings up 9.3 percent for the September quarter, according to Thomson Reuters I/B/E/S.

However, the recent run-up has also sparked concerns about stretched valuations.

The S&P, which is up about 11 percent this year, is trading at 18 times expected earnings, compared to its 10-year average of 14, according to Thomson Reuters Datastream.

The Dow Jones Industrial Average (DJI) rose 25.61 points, or 0.12 percent, to close at 22,118.42. The last time the Dow had nine straight record closes was in February when it boasted 12 in a row.

The S&P 500 (SPX) climbed 4.08 points, or 0.16 percent, to 2,480.91 and the Nasdaq Composite (IXIC) added 32.21 points, or 0.51 percent, to end at 6,383.77.

The S&P's consumer staples index (SPLRCS), up 0.7 percent, and its technology index (SPLRCT), up 0.6 percent were the benchmark's leading sectors on the day.

In coming days, investors will scrutinize quarterly results from retailers in light of competition from online retailer Amazon.com (O:AMZN).

Wal-Mart (N:WMT) shares were up almost 1 percent. Tyson Foods (N:TSN), one of the consumer staples sector's biggest boosts on the day, rose 5.7 percent after the No. 1 U.S. meat processor reported greater-than-expected quarterly profit and sales.

The energy sector (SPNY) led the laggards with a 0.9 percent drop as oil prices (LCOc1) (CLc1) edged lower on a rebound in production from Libya's largest oil field, along with worries about higher output from OPEC and the United States. [O/R]

Declining issues outnumbered advancing ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.

© Reuters. A trader works on the floor of the NYSE in New York

About 5.29 billion shares changed hands on U.S. exchanges compared with the 6.13 billion average for the last 20 sessions.

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