Created on Monday, 21 October 2013 Written by STEVE ROTHWELL, AP Markets Writer
NEW YORK (AP) — The Standard & Poor's 500 index held its record high Monday as investors assessed third-quarter earnings news.
Earnings are the main focus for investors this week as major U.S. companies including McDonald's, Boeing and Procter & Gamble report their results. Rising profits have been one of the key supports for this year's rally in stocks.
Toymaker Hasbro and the V.F. Corporation, which owns clothing brands including Wrangler and The North Face, were among the biggest gainers in the S&P 500 Monday after reporting earnings that beat analysts' expectations. McDonalds dipped after it reported disappointing revenue.
The S&P 500 was up less than a point to 1,745 as of 1:20 p.m. Eastern time. That's one point above the all-time high it reached on Friday, two days after Washington reached a deal to end a 16-day government shutdown and avert a default on the nation's debt.
The index is up 22 percent so far this year, putting it on track for its best year since 2009.
The Dow Jones industrial average edged down a point to 15,397. The Nasdaq composite rose six points, or 0.1 percent, to 3,922.
Stocks will likely continue adding to their gains, at least until the end of the year, as investors get more confident that the market's rally is sustainable, said Joe Bell, a senior equities analyst at Schaeffer's Investment Research.
"We've had a pretty decent run here," Bell said. "It wouldn't surprise me if we saw the momentum slow a bit through the end of October and then have a nice rally through November and December."
McDonald's fell 56 cents, or 0.6 percent, to $94.63 after the world's biggest hamburger chain's revenue fell short of Wall Street analyst's expectations.
Hasbro surged after reporting that its net income rose 17 percent as sales increased. Its adjusted results and revenue topped analysts' estimates. The stock climbed $3, or 6 percent, to $50.26.
Companies are expected to grow earnings by 3.4 percent in the July-to-September period, according to the latest data from S&P Capital IQ. As of Friday, about 60 percent of companies reported earnings had beaten analysts' expectations.
"Earnings so far have been excellent," said Jerry Braakman, chief investment officer of First American Trust. "Earnings are coming in and beating (expectations) by a penny here and there, and we're very comfortable with that."
Company earnings will likely continue to grow as the outlook for the global economy brightens, as Europe continues to recover from its recession and growth in China picks up, said Braakman.
The continued stimulus for the economy from the Federal Reserve should also help support the economy and corporate earnings. The U.S. central bank is currently buying $85 billion of bonds to support the economy.
Homebuilders slumped after Americans bought fewer previously occupied homes in September than the previous month, held back by higher mortgage rates and rising prices. The National Association of Realtors said Monday that sales of re-sold homes fell 1.9 percent last month to a seasonally adjusted annual rate of 5.29 million.
KB Home fell 77 cents, or 4.3 percent, to $16.43. D.R. Horton dropped 66 cents, or 3.5 percent, to $18.36.
The government's delayed monthly jobs report for September will be released Tuesday, given investors more information about the strength of the U.S. economy. The report, which is typically released on the first Friday of every month, was delayed because of the government shutdown.
In government bond trading, the yield on the 10-year note edged up to 2.60 percent from 2.58 percent Friday.
In commodities trading, the price of oil dipped below $100 for the first time since early July after a government report showed that U.S. supplies continue to rise. Oil was trading $1.11, or 1.1 percent, lower at $100 a barrel in early afternoon trading, after falling as low as $99.79. Gold rose $1.40, or 0.1 percent, to $1,316 an ounce.
Among stocks making big moves;
— Tellabs rose 11 cents, or 4.7 percent, to $2.46 after the communications equipment maker agreed to be acquired for $891 million by investment firm Marlin Equity Partners.
— V.F. Corporation rose $8.50, or 4.2 percent, to $212.80 after its earnings beat analysts' expectations.
— Gannett, the media company that owns USA Today, fell $1.50, or 5.4 percent, to $26 after the company reported lower earnings and revenue for the third quarter.