Stocks edge higher on Wall Street after record-setting week
NEW YORK (AP) — U.S. stocks edged further into record territory Monday after a government report showed a surge in consumer spending last month.
The Commerce Department reported the biggest gain in consumer spending in a decade. It is the latest report to raise investor confidence in the market. On Friday, the U.S. government reported a surprise surge in economic growth during the first quarter, which helped push the broad S&P 500 index to the second of its record finishes last week.
Solid corporate earnings reports have also alleviated some pressure on the market over the last several weeks. Analysts have been expecting a sharp downturn in corporate profits, but it has yet to materialize. The steady stream of earnings results will continue this week, giving investors a broader picture of how the economy is doing.
Banks and other financial companies led the market gains following the solid consumer spending. Bank of America rose 2.3% and JPMorgan Chase rose 2.1%
Ingersoll-Rand helped lift industrial companies on media reports that it is making a deal with Gardner Denver Holdings.
Utility companies and real estate stocks lagged the broader market and held the gains in check.
Looking ahead to the week, investors are closely watching the Federal Reserve as it meets this week to update its interest rate forecast. The central bank has indicated it won’t raise rates this year, and that has taken some pressure off the market. Investors are hoping it will continue with its hands-off approach. The Fed will issue its latest policy statement Wednesday.
More relief is also coming from ongoing negotiations between the U.S. and China as they try to end a costly trade war. Both sides have said they are making progress and are continuing talks this week.
Meanwhile, several key U.S. companies will report earnings results this week. Technology giants Google and Apple will release their results, as will pharmaceutical companies Merck and Pfizer. McDonald’s is also scheduled to report earnings.
KEEPING SCORE: The S&P 500 index rose 0.2% as of 1:37 p.m. Eastern time. The broad index had two record high closes last week and is now up 17.6% for the year.
The Dow Jones Industrial Average was up 28 points, or 0.1%, at 26,572, and the Nasdaq composite rose 0.2%. Both the S&P 500 and Nasdaq were on pace to close at record highs.
HEAVY INDUSTRY: Ingersoll-Rand rose 5.9% after the Wall Street Journal reported that a deal is in the works between the industrial parts maker and Gardner Denver Holdings. Both companies make pumps and compressors for industrial machinery.
CRUDE FIGHT: An oil-infused bidding war is heating up after Anadarko resurrected buyout talks with Occidental, even though it has already accepted a $33 billion bid from Chevron.
Anadarko said that it reopened talks with Occidental because its bid may be better than the one it received from Chevron. Occidental’s stock fell 1.5%.
UNDERCOOKED: Restaurant Brands International, the company behind Burger King and Tim Horton’s, fell 1.1% after its profit fell short of forecasts.
The company reported slower sales growth at its Burger King, Popeye’s and Tim Horton’s locations.