Dow Climbs to Record as Internet Shares, Retailers GainJoseph Ciolli
U.S. stocks rose, sending the Dow Jones Industrial Average to a record, as Internet shares rebounded after a three-day selloff and Gap Inc. led retailers higher.
Groupon Inc. and LinkedIn Corp. rose more than 2.5 percent to pace gains among Internet stocks. Gap surged 3.3 percent amid an unexpected increase in April sales. Symantec Corp. rose 3.3 percent as its sales forecast exceeded analysts’ predictions. CBS Corp. fell 2.2 percent after posting quarterly revenue that missed estimates. Ralph Lauren Corp. slipped 2.1 percent as it forecast sales below analysts estimated.
The S&P 500 rose 0.2 percent to 1,878.48 at 4 p.m. in New York. The Dow increased 32.37 points, or 0.2 percent, to 16,583.34, topping its previous record close reached April 30. The Russell 2000 Index of small stocks added 0.9 percent. The Nasdaq Composite Index climbed 0.5 percent. About 5.8 billion shares changed hands on U.S. exchanges, 13 percent below the three-month average.
“The market is just trying to find footing,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, said in a phone interview. His firm manages $1.1 billion. “You’ve seen the market changing its mind throughout the day quite a bit recently. That’s indicative of people trying to search for direction.”
Today’s gain trimmed the S&P 500’s loss for the week to 0.1 percent. The technology-heavy Nasdaq Composite tumbled 1.3 percent, its biggest weekly drop in a month.
The Dow Jones Internet Composite Index rose 1.3 percent today, its first gain in four days. The gauge tumbled 3.6 percent for the week, led by declines of more than 15 percent in Twitter Inc. and Groupon.
Small-caps and Internet shares such as Facebook Inc. and Amazon.com Inc. have been the biggest victims of the market retreat that began two months ago as investors fled last year’s best-performing equities. The Russell 2000 has fallen 8.4 percent from a March 4 record amid concern that prices have outrun earnings.
The Nasdaq Composite is trading at 34.8 times reported earnings, double the multiple of 17.2 for the broad equity measure.
Of the 453 S&P 500 constituents that have released results this earnings season, 76 percent have beaten estimates for profit, while 53 percent have exceeded projections for revenue, data compiled by Bloomberg show. The index’s members increased their earnings by 5.5 percent and their sales by 3 percent in the first quarter, according to analysts surveyed by Bloomberg.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, fell 3.8 percent today to 12.92, after rising 4.5 percent earlier in the day. The gauge added 0.1 percent for the week.
Six out of 10 groups in the S&P 500 rose. Consumer and health-care companies had the best performance, advancing more than 0.5 percent. Technology shares added 0.2 percent as a group. Utilities had the biggest decline, losing 1.4 percent.
Groupon climbed 7 percent to $6.05. The shares, which rose 142 percent in 2013, dropped as much as 56 percent from this year’s high on Jan. 3. LinkedIn, which rallied 89 percent last year, increased 2.5 percent to $148.69. The shares are down 31 percent in 2014.
Netflix Inc. rose 2.1 percent to $328.55, trimming its loss for the week to 3.6 percent. TripAdvisor Inc., Google Inc. and Amazon.com climbed at least 1.2 percent today.
Gap jumped 3.3 percent to $40.52. The apparel maker posted preliminary first-quarter profit that topped analysts’ estimates. Sales in April were led by an 18 percent gain at Old Navy, the retailer’s value-focused brand.
Symantec gained 3.3 percent to $20.79 as the maker of security software forecast first-quarter sales of $1.65 billion to $1.69 billion. Analysts on average had projected $1.64 billion. In the fourth quarter, which ended March 28, net income rose to 31 cents a share from 27 cents a year earlier.
CBS declined 2.2 percent to $56.74 after the owner of the most-watched U.S. television network said first-quarter sales fell 4.6 percent to $3.86 billion. Analysts had predicted $3.92 billion. Advertising revenue dropped 12 percent in the period.
Ralph Lauren lost 2.1 percent to $148.81. Retailers have been deepening discounts and seeking to create new styles to attract shoppers amid shaky consumer confidence and flagging mall traffic. Ralph Lauren said sales at stores open at least a year fell 2 percent in the quarter through March 29, hurt by unseasonably cold weather.