Stocks move higher on earnings, acquisition news
Stocks shook off last week’s doldrums and finished sharply higher Monday, driven by a round of corporate deal news and strong earnings from Citigroup.
Investors cheered AECOM Technology’s $4 billion acquisition of engineering and construction services company URS Corp., sending URS’ stock up 11.6 percent and AECOM 8.6 percent.
Citigroup rose 3 percent after the bank turned in better-than-expected results and disclosed it has agreed to pay $7 billion to settle a federal probe into its mortgage securities business. JPMorgan Chase &Co. and Goldman Sachs, due to report earnings Tuesday, also got a lift.
All told, the three major stock indexes notched their second gain in two days. That’s a turnaround from last week, when the Standard &Poor’s 500 index lost 0.9 percent, its worst showing since April.
Concern about Portugal’s Espirito Santo International, which reportedly missed a debt payment last week, harked back to issues that spawned Europe’s debt crisis.
On Monday, investors appeared to be reassured any problems would be contained.
“Investors are saying if this Portugal thing really isn’t significant from an impact standpoint, and the earnings are coming in good … stocks ought to be going higher,” said Phil Orlando, chief equity strategist at Federated Investments.
The major indexes rose in premarket trading as investors digested Citigroup’s earnings. They opened in the green and held steady through the entire session.
The Standard &Poor’s 500 index rose 9.53 points, or 0.5 percent, to 1,977.10. The index is down 0.4 percent from its most recent all-time high of 1,985.44 set July 3.
Nine of the 10 sectors in the S&P 500 rose, led by energy stocks. Utilities fell the most.
The Dow Jones industrial average added 111.61 points, or 0.7 percent, to 17,055.42. The Dow is down slightly from its July 3 record of 17,068.65.
The Nasdaq composite gained 24.93 points, or 0.6 percent, to 4,440.42.
The three stock indexes are all up for the year.
The yield on the 10-year Treasury note rose to 2.54 percent from 2.52 percent late Friday.
With the market trading near all-time highs, investors will be focused this week on a large number of corporate earnings, including quarterly reports from General Electric, Google, Bank of America and Johnson &Johnson.