PW: US stocks gain, rebounding from Friday's slump
NEW YORK (AP) — U.S. stocks rose on Monday, rebounding from a big slump on Friday. Good first-quarter earnings reports gave the market a boost. Hasbro was among the biggest gainers after the toy maker reported results that were better than analysts had been expecting. Morgan Stanley and Halliburton also reported earnings that beat forecasts.
KEEPING SCORE: The Standard & Poor’s 500 index climbed 21 points, or 1.1 percent, to 2,102 as of 12:13 p.m. Eastern time. The Dow Jones industrial average gained 236 points, or 1.3 percent, to 18,061. The Nasdaq composite climbed 59 points, or 1.2 percent, to 4,990.
TOY STORY: Hasbro gained after reporting better-than-expected earnings as sales of Transformers and other toys climbed. The toy maker is battling a shift toward video gaming, but managed to boost sales of toys targeted at boys and pre-school children. The stock jumped $6.62, or 10 percent, to $72.50.
NO CRUISE: Royal Caribbean was one of the day’s big losers. It’s stock slumped $5.90, or 7.5 percent, to $73.15 after the cruise operator cut its full-year earnings outlook, citing the impact of a strengthening dollar and higher fuel costs.
THE EARNINGS PICTURE: Investors will be focusing on earnings this week, as 147 companies, close to one-third of the companies in the S&P 500, report their first-quarter results. Currently, analysts are predicting earnings-per-share will side by an average of 2.6 percent in the first quarter, according to S&P Capital IQ data. If that forecast holds, it will mark the first quarter since 2009 that earnings have contracted.
The reason for the slump is a big drop in energy company earnings linked to a sharp drop in the price of oil and a surge in the value of the dollar. As the U.S. currency strengthens, it reduces the earnings of companies that rely on overseas sales.
THE QUOTE: “To me the whole week is about earnings,” said JJ Kinahan, chief trading strategist for TD Ameritrade. Specifically, Kinahan said, investors should pay close attention to what corporate leaders are saying about the outlook for the rest of the year and whether they’ll still be able to meet their earnings targets.
EUROPE’S DAY: Germany’s DAX rose 1.7 percent and France’s CAC 40 added 0.9 percent. Britain’s FTSE 100 gained 0.7 percent.
CHINA STIMULUS: China’s central bank on Sunday cut the required reserve ratio for banks by 1 percentage point to stimulate lending as the country’s economic growth slows. The lower reserve requirement allows banks to lend out more of their deposits. Official data showed last week that China’s economy grew by 7 percent in the first quarter of the year, the lowest quarterly expansion since the 2008 financial crisis.
ASIA’S DAY: China’s Shanghai Composite closed 1.6 percent lower after rising as much as about 1 percent in early trading. Hong Kong’s Hang Seng sank 2 percent to while South Korea’s Kospi added 0.2 percent. Japan’s Nikkei 225 fell 0.1 percent.
ENERGY: Benchmark U.S. crude rose 74 cents to $58.05 per barrel in New York. Brent crude rose 35 cents to $63.80 a barrel in London.
BONDS AND CURRENCIES: Government bond prices edged lower. The yield on the benchmark 10-year Treasury note rose to 1.88 percent from 1.86 percent on Friday. In currency trading, the euro weakened to $1.0735 from $1.0805 on Friday. The dollar rose to 119.17 yen from 118.94 yen.
