PCE inflation, ISM readings are weaker than expected
U.S. stock-market benchmark traded firmly higher, with shares of Apple hitting a record, as investors digested a raft of economic reports and looked ahead to the start of the Federal Reserve's policy meeting on Tuesday.
The S&P 500 index was up 9 points, or 0.4%, to 2,393, with seven of the 11 main sectors trading in positive territory. Utilities were the biggest loser, down 0.7%, while technology and financial stocks led the gains.
The Dow Jones Industrial Average , which dipped in and out of negative territory, last traded 22 points, or 0.1%, higher at 20,961, pressured by a 1% decline in Dow component Boeing Co.(BA) as Apple Inc. and Microsoft Corp.(MSFT) shares led gainers. The blue-chip benchmark briefly slipped into negative territory following comments by President Donald Trump that he was looking at breaking up big banks (http://www.marketwatch.com/story/bank-stocks-rebound-from-fleeting-retreat-even-as-trump-said-to-consider-break-up-rule-2017-05-01), with a retreat in financials contributing to much of that dip.
"We're still susceptible to knee-jerk reactions," said Karyn Cavanaugh, senior market strategist at Voya Financial, in an interview. "But earnings are still coming in much better than expected with 12% growth."
Meanwhile, the Nasdaq Composite Index was up 49 points, or 0.8%, to 6,097, setting a fresh intraday high, briefly touching an all-time intraday high of 6,100.73, less than a week after first reaching the psychologically significant level of 6,000 on April 25.
Apple's shares (AAPL) surged 2.3% and has spent the session carving out fresh all-time highs, most recently $146.99. The stock is a major component in the three major U.S. stock indexes. The company reports quarterly results (http://www.marketwatch.com/story/apple-services-likely-to-top-7-billion-this-quarter-2017-04-26) Tuesday afternoon.
Over the weekend, Congress cut a deal to fund the government (http://www.marketwatch.com/story/congress-reaches-deal-to-fund-government-through-september-2017-04-30) through Sept. 30, which includes an increase in military spending, a priority for President Trump and his fellow Republicans.
"Investors are relieved that the deal to run the government a little longer is in place," said Ian Winer, director of equity trading at Wedbush Securities.
The funding agreement also includes $1.5 billion for border security, but says explicitly that the money can't be used to pay for the construction of a new border wall that Trump has made a signature campaign promise.
"The avoidance of a U.S. government shutdown helped markets shift from a neutral to more positive tone overnight in Asia," said Jasper Lawler, senior market analyst at London Capital Group, in a note early Monday. "The Japanese yen extended last week's losses on Monday as geopolitical risk retreated, helping Japanese stocks gain (http://www.marketwatch.com/story/japanese-stocks-end-higher-with-key-asian-and-european-markets-shut-for-holiday-2017-05-01)."
"With many markets closed around the world including most of Europe, trading should be light on Monday," Lawler added.
In other political news, former Italian Prime Minister Matteo Renzi emerged victorious over the weekend in a key primary election (http://www.marketwatch.com/story/matteo-renzi-on-track-to-win-italys-democratic-party-election-2017-04-30), helping to soothe investors who have worried about disruptions to the status quo in Europe.
Economic news: (http://www.marketwatch.com/story/congress-reaches-deal-to-fund-government-through-september-2017-04-30)Consumer spending was unchanged in March, while personal income climbed 0.2%. The Federal Reserve's preferred measure of inflation (http://www.marketwatch.com/story/us-inflation-retreats-in-march-from-5-year-peak-2017-05-01), personal-consumption expenditures index, retreated from a five-month peak in March. The PCE index fell 0.2% to mark the first decline in more than a year.
A Markit report on manufacturing came in at 52.8. ISM manufacturing index fell to 54.8 in April, while Construction spending declined 0.2% in March.
Later in the week, investors face more possible market catalysts, as the Federal Reserve is due to make a policy announcement on Wednesday and the April jobs report arrives Friday.
See:Fed, jobs data and Apple earnings to keep investors busy (http://www.marketwatch.com/story/fed-jobs-data-and-apple-earnings-will-keep-stock-market-investors-busy-2017-04-29)
Individual movers: Shares in WGN America parent Tribune Media Co.(TRCO) jumped 6% following reports that 21st Century Fox Inc.(FOX) and private-equity firm Blackstone Group(BX) are in talks about a joint bid to buy the broadcaster (http://www.marketwatch.com/story/fox-blackstone-may-launch-joint-bid-for-tribune-media-report-2017-04-30).
Neurotrope Inc.(NTRP) shares plummeted (http://www.marketwatch.com/story/neurotrope-stock-drops-34-on-midstage-trial-results-for-alzheimers-drug-2017-05-01) 59% after the company released mid-stage clinical trial results for an Alzheimer's disease drug that were criticized by investors.
Netflix Inc.(NFLX) shares hit a new all-time high of $157.70, and were last up 3.6%.
Ahead of the open, pay TV company (http://www.marketwatch.com/story/dish-network-profit-beat-expectations-but-sales-missed-as-subscribers-dropped-2017-05-01)Dish Network Corp.(DISH) and drug distributor (http://www.marketwatch.com/story/cardinal-health-reports-q3-profit-beat-revenue-miss-2017-05-01)Cardinal Health Inc.(CAH) both reported quarterly profit that beat expectations, but sales that missed forecasts. Dish shares fell 0.7%, and Cardinal shares were down 0.9%.
Other markets:Oil futures (http://www.marketwatch.com/story/crude-prices-fall-extending-weak-april-tone-2017-05-01) dropped 1.3%, and gold futures (http://www.marketwatch.com/story/gold-trades-lower-set-to-snap-2-session-advance-2017-05-01) settled down 1% at $1,255.50 an ounce, their lowest settlement in three weeks. A key dollar index was slightly higher. The yield on the 10-year Treasury note rose 4 basis points to 2.326%.
--Victor Reklaitis in London contributed to this article.
(END) Dow Jones Newswires
May 01, 2017 14:12 ET (18:12 GMT)