Wall Street logs gains on strong earnings
Health care and energy companies helped push stocks higher Monday, as Wall Street kicked off the first trading day in May with more gains after a four-month winning streak.
The S&P 500 rose 0.3 percent. Industrial and financial stocks also helped lift the market. Falling technology and communication stocks, and companies that rely on consumer spending, kept the market’s gains in check. Treasury yields were mixed.
Investors welcomed new economic data indicating the economy is strengthening. They also continued to focus on the latest batch of corporate earnings reports, which have been mostly encouraging and have helped fuel optimism about a solid economic recovery this year.
“In terms of earnings, we’re in a good place,” said Hilary Kramer, chief investment officer for Kramer Capital Research. “The good news is that we’re getting excellent guidance from these companies.”
The S&P 500 index rose 11.49 points to 4,192.66. The benchmark index’s latest gains follow a 5.2 percent surge in April, its best month since November 2020, when President Joe Biden was elected. It logged a gain of about 28 percent between November and April.
The Dow Jones Industrial Average added 238.38 points, or 0.7 percent, to 34,113.23. The techheavy Nasdaq shed an early gain and lost 67.56 points, or 0.5 percent, to 13,895.12.
Smaller companies, which have outgained the broader market this year, also had a good showing. The Russell 2000 index picked up 11 points, or 0.5 percent, to 2,277.45.
Stocks have been grinding higher on expectations of an economic recovery and strong company profits this year as large-scale coronavirus vaccination programs help people return to jobs and normal behaviors after more than a year of restrictions. Massive support from the U.S. government and the Federal Reserve, and increasingly positive economic data, have also helped put investors in a buying mood, keeping stock indexes near their all-time highs.
More than half of the companies in the S&P 500 have reported their results this earnings season, which show profit growth of 54 percent so far, according to FactSet.
This will be another busy week for earnings reports, with Merck, Pepsi, Colgate-Palmolive and CVS the companies reporting their quarterly results. Investors will also get April’s jobs report on Friday.
Among the gainers Monday were oilfield services company Baker Hughes, which vaulted 8 percent, clothing retailer Gap, which jumped 7.2 percent, and flooring manufacturer Mohawk Industries, up 7.5 percent.
Warren Buffett’s Berkshire Hathaway rose 1.5 percent after the billionaire investor named his successor. Greg Abel, who runs Berkshire Hathaway’s non-insurance business, will step into the CEO role when Buffett retires.