Nasdaq notches another record close
Stocks climbed Monday as the Nasdaq composite notched a new closing high and the S&P 500 came close amid a stream of good earnings reports and the situation in Greece becoming less dire.
The Nasdaq ended at 5218.86, a record close on a gain of nine points, or 0.2%, for the day. This followed last week’s record-setting run, powered in large part by strong earnings from bellwethers like Google (GOOG) that sent the Nasdaq to a record high on Friday.
The Standard & Poor's 500 index settled for a 0.1% gain after earlier topping its May 21 record close of 2130.82. It finished the day about two and a half points shy of that mark.
Also finishing up 0.1% was the Dow Jones industrial average, now at 18,100.41.
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The new week on Wall Street is all about earnings, with 126 companies in the Standard & Poor’s 500-stock index reporting second quarter results. Before today’s opening bell, the positive earnings story continued with Wall Street bank Morgan Stanley (MS) and aviation giant Lockheed Martin (LMT) topping expectations, building on last week’s good start to the reporting season and Google’s big beat on Friday.
“The earnings season gets into full swing this week,” says Citigroup’s Manish Somaiya. “So far the second quarter earnings season has been off to a relatively strong start.”
Through the close of trading on Friday, of the 60 companies in the S&P 500 that have reported earnings, 72% have topped forecasts, better than the long-term “beat” average of 63%, according to earnings tracker Thomson Reuters.
After today’s closing bell, IBM reports. Later this week Wall Street will analyze reports from Apple (AAPL), Microsoft (MSFT), Yahoo (YHOO), Chipotle (CMG), Boeing (BA), Coca-Cola (KO), Caterpillar (CAT), Amazon.com (AMZN), AT&T (T) and General Motors (GM).
Wall Street will also be watching Greece again, where the situation appears to be stabilizing after a third bailout deal with creditors was struck last week and bridge loans arranged. Greek banks reopened today after being shuttered for three weeks, but daily and weekly withdrawal limits remain in place. Greece, with the help of a bridge loan, is also said to have made a key debt payment due today to the European Central Bank.
Stocks have regained their mojo as major risks, such as the Greek debt crisis and a sharp slowdown in China’s economy, have eased in recent days amid a deal between Athens and its creditors and a rebound in Chinese stock prices as well as the Chinese government reporting economic growth of a still-solid 7% last quarter.
“The fear rush has been wiped out,” Paul Hickey, co-founder of Bespoke Investment Group told clients in a research note released after Friday’s market close.
Gold prices fell for an eighth straight session, falling to a fresh five-year low of $1.080 an ounce in early trading.