By Dow Jones Business News, October 21, 2013, 04:31:00 PM EDT
MARKET SNAPSHOT: S&P 500 Ends Little Changed, But Nasdaq Gains
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished little changed on Monday, with the S&P 500 adding a fraction to its
record close and the Nasdaq Composite extending gains into a fourth session, bolstered by Netflix Inc., which released
earnings just after the close.
Netflix (NFLX) shares ended Monday's regular trading session 6.4% higher, then surged nearly 17% in after-hours trade
after the provider of streaming video reported third-quarter revenue that beat estimates.
The Dow Jones Industrial Average (DJI) fell 7.45 points, or less than 0.1%, to 15,392.20.
McDonald's Corp. ( MCD ) fell 0.6% after the fast-food chain reported sales below expectations. Another Dow component,
AT&T Inc., (T) climbed 1.8% after the telecommunication company agreed to sell or lease 9,700 wireless towers.
J.P. Morgan Chase & Co. ( JPM ) lost almost 0.1% after the bank reportedly agreed to pay $13 billion to halt U.S. civil
investigations into its mortgage-bond sales.
After rising to an intraday record high of 1,747.79, the S&P 500 index (SPX) rose a fraction to finish at 1,744.66,
just topping its prior record close of 1,744.50 set on Friday. Health care lost the most ground and telecommunications
fared the best among its 10 sectors.
J.C. Penney Co. ( JCP ) shares dropped 8.3% after the retailer last week denied two anonymous social-media attacks that
said the company had retained a bankruptcy lawyer and had lost access to credit in Canada.
Gannett Co. Inc. ( GCI ) shares lost 2.2% after the newspaper chain reported a 4% decline in quarterly revenue. Hasbro
Inc. ( HAS ) gained 5.3% after the toy seller reported third-quarter results that beat Wall Street's expectations.
The Nasdaq Composite (RIXF) rose 5.77 points, or 0.2%, to 3,920.05.
"This has been a year of significant multiple expansion," said Paul Karos, a senior portfolio manager for Whitebox
Mutual Funds, of the price-earnings ratio of U.S. equities. But since that expansion has not coincided with a broad-
based earnings revision upward, "it would not be surprising to see equity markets take a breather," given the market's
more than 20% rise so far this year, he said.
"We can continue to grind higher, but it's a grind, the next sustainable leg would probably need to come from upwardly
revised earnings estimates, that could be hard to come by," Karos added.
Decliners just overcame advancers on the New York Stock Exchange, where 678 million shares traded. Composite volume
cleared 3 billion shares.
On Tuesday, the government releases the nonfarm-payrolls report for September. The data release was among those
delayed by the recently ended 16-day government shutdown.
Equities displayed muted reaction to the National Association of Realtors reporting existing U.S. home sales fell 1.9%
in September due to rising prices and mortgage rates.
Gold futures (GCZ3) rose $1.20 or 0.1%, to $1,315.80 an ounce, and crude futures (CLX3) lost $1.59, or 1.6%, to $99.22
a barrel on the New York Mercantile Exchange.
The dollar(DXY) gained against the currencies of major U.S. trading partners, including the euro (EURUSD) and the yen
The yield on the 10-year Treasury note (10_YEAR) used in figuring mortgage rates and other consumer loans rose 2 basis
points to 2.603%.
"Both the economy and earnings appeared to have had good momentum going into the fourth quarter. However, analysts
will still need to assess how much the (government) shutdown hurt the economy," noted David Kelly, chief global
strategist at J.P. Morgan Funds, in emailed commentary.
The global economy is "still on the mend in the face of the easiest monetary policy ever implemented by developed-
nation central banks. As the economy improves and earnings rise, this aid will gradually be reduced, boosting interest
rates. Despite recent stock-market gains, such an environment still supports the idea of an overweight to equities
relative to fixed income around the world," wrote J.P. Morgan Funds' Kelly.
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