US stock market drifts lower to start the week as investors look toward corporate earnings
The stock market drifted lower Monday as investors looked ahead to a busy week for corporate earnings. Markets in Asia surged after a run of weak economic reports out of China lifted hopes for stimulus in the world's second-largest economy.
KEEPING SCORE: The Dow Jones industrial average fell 22 points, or 0.1 percent, to 18,033 as of 1:45 p.m. Monday. The Standard & Poor's 500 index slipped four points, or 0.2 percent, to 2,098. The Nasdaq composite was flat at 4,995.
The market is coming off its second straight weekly gain. It hasn't had a three-week winning streak since February.
LOW BAR: JPMorgan Chase, Johnson & Johnson, and Intel are among the big names turning in quarterly results Tuesday as earnings season gets underway. Investors are braced for bad news, a result of the stronger dollar and low oil prices squeezing revenues. Analysts forecast that first-quarter earnings shrank 3 percent compared with the same quarter of last year, according to S&P Capital IQ. If that winds up happening, it would be the first drop in quarterly profits since 2009.
ONE VIEW: Brad McMillan, chief investment officer for Commonwealth Financial Network, said those numbers shouldn't raise too many worries. "Usually when earnings go down it means the economy is going in the tank, because most earnings come from domestic sales," he said. "This time is different. The big hit to earnings is from energy companies just getting hammered by oil prices. And a big chunk of the rest is from the stronger dollar."
DEAL: Builders FirstSource said its buying ProBuild, a supplier of building materials, for roughly $1.6 billion, aiming to expand its geographic reach. ProBuild Holdings, a private company, runs lumberyards and retail stores across 40 states. The deal is expected to close in the second half of the year. Builders FirstSource soared $4, or 58 percent, to $10.90.
JETTING: JetBlue Airways surged after the airline reported a 9 percent increase in passengers last month compared with the same period a year ago. The company's stock jumped $1.15, or 6 percent, to $20.20.
GOLD: Two gold mining companies, Alamos Gold and AuRico Gold, announced a plan to merge on Monday in a deal worth $1.5 billion. It's the latest merger between gold miners attempting to cut costs in the face of slumping prices for precious metals. Alamos Gold jumped 36 cents, or 6 percent, to $6.25. The price of gold has lost a third of its value since late 2012, when it traded as high as $1,780 an ounce. Gold fell $5.30 to $1,199.30 an ounce Monday.
CRUDE: Benchmark U.S. oil rose 73 cents to $52.34 a barrel on the New York Mercantile Exchange.
EUROPE: Major stock markets in Europe were mixed. Germany's DAX sank 0.3 percent, while France's CAC 40 rose 0.3 percent. Britain's FTSE 100 fell 0.4 percent.
CHINA: Markets in China jumped on expectations that Beijing will launch additional stimulus to spur slowing economic growth. Imports fell 12 percent in March from a year earlier and exports declined 15 percent. That added to signs that growth in the first three months of the year, due to be reported Wednesday, might decline further from the previous quarter's 7 percent.
ASIA'S DAY: Major indexes in China reached seven-year highs. Hong Kong's Hang Seng gained 2.7 percent, closing at its highest level since December 2007. The Shanghai Composite Index surged 2.1 percent, hitting its highest level since March 2008. In South Korea, the Kospi rose 0.5 percent. India's Sensex added 0.3 percent and Australia's S&P ASX 200 edged up 0.1 percent. In Japan, the Nikkei 225 closed the day nearly unchanged.
BONDS, CURRENCIES: Prices for U.S. government bonds didn't move much. The yield on the 10-year Treasury note held steady at 1.94 percent. The dollar rose to 120.69 yen from Friday's 120.18 yen. The euro slipped to $1.0530 from the previous session's $1.0586.