Friday, Aug 17, 2012
--Stocks tread higher; overseas also gain
--European markets up on back of Merkel's comments on maintaining euro
--Early August consumer sentiment reading unexpectedly rises
By Matt Jarzemsky
NEW YORK--Major U.S. stock benchmarks inched closer to their highs for the year, led by sectors seen as tied to economic growth, after a reading on Americans' feelings about the economy unexpectedly improved.
The Dow Jones Industrial Average added 19 points, or 0.2%, to 13269 in midday trading, extending a rally from Thursday. Gains since early June have the blue-chip benchmark nearing its May 1 closing high for the year, of 13279.
The Standard & Poor's 500-stock index rose one point, or 0.1%, to 1417, two points off its 2012 closing high. Technology shares led the advance as Apple ticked up 1.2%, after posting its highest closing price ever Thursday. Consumer discretionary and industrial stocks rose while health care and utilities lagged behind.
The Nasdaq Composite Index advanced seven points, or 0.2%, to 3070.
"We seem to be in a little bit of a melt-up, even though it's the dog days of summer. Consider just how far we've come in the last couple of weeks," said John De Clue, chief international strategist at U.S. Bank in Minneapolis.
The Thomson-Reuters/University of Michigan consumer sentiment index for early August unexpectedly rose from its end-of-July level, according to a Dow Jones Newswires report.
The Conference Board's index of leading indicators for July rose more than expected, but still suggests little improvement in the economy.
"We had some relatively positive economic data pushing the market a little bit higher, but it's kind of a sluggish day in terms of big earnings reports or other things to really move the market either way," said Daniel Morgan, senior portfolio manager at Synovus Trust, which oversees $9.1 billion in assets.
In corporate news, shares of Facebook fell 3.5% after touching an all-time low of $19.01. The stock closed below $20 for the first time Thursday after more early investors' shares were made available for sale.
European markets traded broadly higher, with the Stoxx Europe 600 up 0.6%, as German Chancellor Angela Merkel's comments on Thursday that Germany was committed to maintaining the euro continued to bolster sentiment.
Markets shrugged off data showing that bad debts held by Spanish banks rose in June to the highest level on record. Spain's IBEX-35 stock index rallied 1.5%.
Asian markets were also mostly higher, with Japan's Nikkei Stock Average gaining 0.8% to close at the highest level in over three months. China's Shanghai Composite edged up 0.1%.
Crude-oil futures were flat at $95.60 a barrel, after settling the previous session at a three-month high, while gold futures slipped 0.2% to $1,616.00 an ounce. The dollar gained ground against both the euro and the yen.
In other corporate news, J.M. Smucker jumped 6% after saying this year's profit will be at the high end of its forecast range. For the latest quarter, the maker of namesake jams, Jif peanut butter and Pillsbury pastries reported better-than-expected sales as volume rose.
Marvell Technology tumbled 15% after the semiconductor maker's fiscal second-quarter earnings and revenue fell short of analyst estimates, citing the slowdown in the macroeconomic environment.
Gap gained 5.3% after the apparel retailer reported fiscal second-quarter earnings that were above the company's previously provided expected range and raised its full-year outlook.
Also in the retail sector, Ann jumped 21% after the women's apparel seller's fiscal second-quarter earnings were well above analyst estimates as provided by FactSet, and its full-year outlook came in slightly above current projections.
Foot Locker rose 2.3% after the athletic shoe retailer's fiscal second-quarter earnings and revenue beat estimates, with gross margin increasing and merchandise inventory declining.
Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com
(END) Dow Jones Newswires
August 17, 2012 12:26 ET (16:26 GMT)