11:38 am

  Local News
  State / National / World
  Opinion / Letters
  Arts / Entertainment
  Submit Event
  Comics / Games
  DJ Designers
  Advertise With Us
  About Us
Stocks stabilize to end down week
July 12, 2014, 05:00 AM The Associated Press

NEW YORK — U.S. stocks stabilized on Friday and ended with a small gain, but it wasn’t enough to prevent the market’s biggest weekly drop since April.

Investors became more cautious this week as corporate earnings for the April-June period began trickling in. Worrisome news about a Portuguese bank also revived fears of another European debt crisis. That weighed on stocks, which had closed out the previous week at record highs.

Investors are now mulling whether the stock’s market valuations are justified by the outlook for company earnings, or whether they have risen too far, too fast.

As investors try to make sense of the market, “we could be in a holding pattern,” said Kristina Hooper, US Investment Strategist at Allianz Global Investors.

The Standard & Poor’s 500 rose 2.89 points, or 0.2 percent, to 1,967.57 on Friday. The weekly decline of 0.9 percent was the biggest since April 11.

The Dow Jones industrial average climbed 28.74 points, or 0.2 percent, to 16,943.81. The Nasdaq composite rose 19.29 points, or 0.4 percent, to 4,415.49.

On Friday, investors absorbed corporate news and earnings.

Lorillard, whose cigarette brands include Newport, Old Gold and Kent, rose $2.92, or 4.6 percent, to $66.01. Lorillard and rival Reynolds American confirmed they are in talks to combine — a deal that would create a formidable rival to Altria Group Inc., owner of Philip Morris USA.

Investors also pored over company earnings.

Fastenal, a maker of industrial fasteners, fell the most in the S&P 500. Its stock dropped $2.01, or 4.2 percent, to $46.15 after reporting sales that missed analysts’ expectations.

As U.S. companies start to report second-quarter results, investors expect more growth in profits. Earnings for S&P 500 companies are forecast to climb by 6.4 percent. That rise is bigger than the 3.4 percent increase in the first quarter and 4.9 percent in the same period a year earlier, according to data from S&P Capital IQ.

While earnings are rising, stock valuations have also climbed.

The price-earnings ratio for S&P 500 companies, which measures a company’s stock price compared to next year’s forecast earnings, has edged higher to 15.7 from 15.1 at the start of this year and 12.6 at the start of 2013.

“With valuations where they are ... we are pleasantly surprised at the resilience of the market,” said Colleen Supran, a principal of Bingham, Osborn & Scarborough an investment management company. “Investors still seem to be able to find reasons not to panic.”

Stocks opened on Thursday with a big loss as investors worried about the health of a holding company linked to Portugal’s biggest bank. That revived memories of Europe’s debt crisis. After falling heavily in early trading the market regained much of its losses.

In government bond trading, prices rose. The yield on the 10-year Treasury note, which moves in the opposite direction to its price, dropped to 2.52 percent from 2.54 percent.

Oil had its biggest one-day drop since April, as Libyan oil appears poised to return to the market while global demand looks to be muted. Oil fell $2.23, or 2.2 percent, to $100.70.



Tags: percent, investors, earnings, market, biggest, april,

Other stories from today:

New York sues to stop ride-sharing Lyft
UnitedHealth Group sues California over fine
Stocks stabilize to end down week

Print this Page Print this Page  |  Bookmark and Share
<< Back
Return To Archives

Daily Journal Quick Poll
Do you agree with Gov. Brown signing The End of Life Option Act, which allows terminally ill patients to end their lives with the help of a doctor?

Yes, it will allow those with terminal conditions to die with dignity
No, doctors are sometimes too hasty in determining someone is terminally ill
Not sure


Phone scam making the rounds in San Mateo County
The San Mateo County Sheriff's Office is warning residents to beware of a telephone scam involving a..
IMF downgrades forecast for world, emerging market economies
LIMA, Peru — China's slowdown and tumbling commodity prices will push global economic growth this ..
Top general in Afghanistan: US strike on hospital a mistake
WASHINGTON — The deadly American attack on a hospital in northern Afghanistan occurred despite "ri..
More >>  

©2015 San Mateo Daily Journal
San Mateo County fictitious business name statements