US stocks higher on corporate news, earnings
AP and AFP
August 13, 2014, 12:02 am TWN
NEW YORK/HONG KONG -- U.S. stocks gained on Monday as investors focused on corporate news instead of geopolitical worries.
Kinder Morgan surged after announcing that it would combine a group of businesses that it controls to create the fourth-biggest U.S. energy company by market value. Banana seller Chiquita Brands International soared after the company received a US$611 million buyout offer.
The stock market was extending a rebound from Friday when it logged its biggest one-day gain in five months following signs that tensions in Ukraine might be easing. In July stocks had slumped as tensions between Russia and the West had escalated.
The Standard & Poor's 500 index rose 5.33 points, or 0.3 percent, to 1,936.92. The Dow Jones industrial average climbed 16.05 points, or 0.1 percent, to 16,569.98 percent. The Nasdaq composite gained 30.43 points, or 0.7 percent, to 4,401.33.
Investors were also tracking corporate earnings reports.
Shares of Priceline Group rose US$27.72, or 2.2 percent, to US$1,309.20 after the company reported second-quarter earnings that topped Wall Street expectations. The online travel company said the summer season got off to a strong start. Shares of rival Expedia gained US$1.39, or 1.7 percent, to US$83.94.
More than 90 percent of the companies in the S&P 500 index have now reported earnings for the second quarter.
Company earnings are expected to grow by 10.1 percent in the period, according to data from S&P Capital IQ. That compares with growth of 4.9 percent in the second quarter last year and growth of 3.4 percent in the first quarter.
Stocks have also been getting a lift as the flow of mergers and acquisitions has picked up this year.
Even though stocks have rallied over the last two days, investors should get used to the prospect of increased volatility in the market as the Federal Reserve nears the end of its economic stimulus program and gets closer to raising interest rates, said Kristina Hooper, US Investment Strategist at Allianz Global Investors.
U.S. government bond prices were little changed. The yield on the 10-year Treasury note held at 2.42 percent from Friday, close to its lowest level in a year.
Longer-dated Treasury notes and bonds have surged this year even though the Federal Reserve is winding down its economic stimulus and purchasing fewer bonds.
Asian shares closed mostly higher Tuesday, tracking rallies on Wall Street and in Europe as easing geopolitical tensions lifted investor confidence.