Markets post modest gains as earnings season begins


U.S. stocks Monday ended higher as investors looked forward to the kickoff of earnings season.

The Dow Jones industrial average rose 88.85, or 0.59 percent, to 15,224.69. The Standard & Poor’s 500 index climbed 8.57, or 0.53 percent, to 1,640.46, while the Nasdaq composite added 5.45, or 0.16 percent, to 3,484.83.

Investors were not expecting especially impressive earnings for the second quarter.

Current forecasts suggest profit growth of 0.8 percent and revenue growth of 1.2 percent from S&P 500 companies, said Briefing.com analyst Patrick O’Hare.

But investors will focus more on what companies say about the rest of the year, analysts said. The hope is that Friday’s strong jobs report and other recent indicators of economic improvement will translate into better earnings in the second half of 2013.

“Investors realize we did not have blockbuster growth in the first half, but they are focused on the quarters ahead,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “The stock market is forward-looking.”

Leading banks scored outsized gains. Citigroup stocks rose 2 percent, Wells Fargo stocks climbed 1.8 percent and Bank of America stocks jumped 1.7 percent. The gains followed a bullish report from Raymond James, which sees stronger asset quality fueling earnings growth in the sector, according to Barrons.com.

Retail giant Walmart stocks also had a good day, rising 2 percent.

Meanwhile, Intel stocks dropped 3.6 percent following a downcast note from Citigroup that predicted weak profits in light of the declining personal computer market.

Alcoa, traditionally first to report quarterly earnings, rose 11 cents, or 1.4 percent, to $7.92 during the day and was flat after releasing its second-quarter figures, which came in with earnings of 7 cents per share, 1 cent above expectations. Profits fell from the first quarter due to lower aluminum prices.

Computer company Dell jumped 3.1 percent to $13.34 after the closely-watched Institutional Shareholders Services advisory group endorsed a proposed transaction led by Dell founder Michael Dell to take the company private. The offer would pay $13.65 per share.

Thomson Reuters stocks rose 0.2 percent after announcing that it would suspend the early release of key economic data to high-speed traders. The move comes in response to an investigation by the New York state attorney general on whether the release of the data gives an unfair advantage to buyers of the high-priced service.

European markets closed higher, with the FTSE index of British shares adding 1.17 percent to end at 6,450.07 points. Germany’s DAX jumped 2.08 percent to 7,968.54 points, while France’s CAC 40 rose 1.86 percent to 3,823.83.