The News Herald (Willoughby, OH)
S&P 500 closes 7th straight month of gains
Stocks inched ahead after the makers of Oreo cookies joined companies reporting strongerthan-expected profits.
NEW YORK » U.S. stocks inched ahead on Tuesday after the makers of Kellogg’s cereal and Oreo cookies joined the parade of companies reporting stronger-than-expected profits.
The Standard & Poor’s 500 index gained 2.43 points, or 0.1 percent, to 2,575.26, the latest tick higher in what’s been a remarkably smooth ride this year. The index closed out October with its seventh straight month of gains, the longest such streak in more than four years.
The Dow Jones industrial average rose 28.50, or 0.1 percent, to 23,377.24, and the Nasdaq composite gained 28.71, or 0.4 percent, to 6,727.67, a new record. Smaller stocks did better than the rest of the market, and the Russell 2000 index of small-cap stocks gained 11.64, or 0.8 percent, to 1,502.53.
Food companies helped lead the market higher after Kellogg and Mondelez International both reported stronger results for the latest quarter than analysts expected. Kellogg jumped $3.66, or 6.2 percent, to $62.53, and Mondelez rose $2.13, or 5.4 percent, to $41.43.
“It’s been a fantastic earnings season,” said JJ Kinahan, chief market strategist at TD Ameritrade. “People talk about taxes, low interest rates and all these other things, but what really drives the market is earnings.”
More than half the companies in the S&P 500 have reported their results for the July-through-September quarter, and most have topped Wall Street’s forecasts. Several big names are still on the docket for this week, with Facebook set to report on Wednesday and Apple on Thursday.
Rockwell Automation surged to the biggest gain in the S&P 500 after it received a buyout bid worth $215 per share in cash and stock. The company said it rejected the unsolicited bid from Emerson Electric on Oct. 10. Rockwell Automation jumped $13.82, or 7.4 percent, to $200.82.
On the losing end was Under Armour, which recorded the largest loss in the S&P 500 after it said demand for its sporting gear in North America weakened last quarter and cut its forecast for earnings this year. Its Class A shares fell $3.89, or 23.7 percent, to $12.52.
Besides earnings, investors are also facing a deluge of other events that could be headliners on their own.
Several of the world’s largest central banks are meeting this week, and the Bank of Japan decided on Tuesday to keep its interest rates at ultra-low levels. The Bank of England is expected to raise interest rates on Thursday, which would be the first increase in in a decade. And the Federal Reserve will wrap up a two-day meeting on Wednesday, though most economists expect it to wait until its December gathering to raise rates for the third time this year.
More attention is on President Donald Trump’s choice for the next Fed chair. He’s expected to make the announcement on Thursday, and the leading candidate appears to be Jerome “Jay” Powell, who is already a member of the Fed’s board.
The Fed has been slowly raising interest rates, and encouraging economic reports on Thursday further strengthened expectations that it will continue. Confidence among U.S. consumers hit its highest level last month in nearly 17 years, for example.