THE S&P 500 index inched upward on relatively light volume yesterday, with investors adding to winning positions in technology stocks, but avoiding large bets ahead of corporate earnings due next week.
After days of struggling, the broader market index broke above the closely watched 1,333 level. The next closely watched technical point is 1,344, the high dating to June 2008.
“It would be tough (to break above 1,344). We might go near that before the earnings since I think earnings will be mostly ‘sell on the news’,” said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
It has now been nine trading days since the S&P 500 rose or fell more than 0.7 per cent, a sign of relative calm amid few trading catalysts. Volume was 7.31bn on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with last year’s estimated daily average of 8.47bn.
Markets derived some comfort from Tuesday’s comments from Cisco chief executive John Chambers. Cisco Systems shares rose 4.9 per cent to $18.07 after Chambers admitted on Tuesday the one-time technology bellwether and Wall Street darling has lost its way and will need to restore its credibility. Hewlett-Packard shares rose 2.2 per cent to $41.18. Microsoft rose 1.4 per cent to $26.15.
The Dow Jones industrial average rose 32.85 points, or 0.27 per cent, to close at 12,426.75. The Standard & Poor’s 500 Index gained 2.91 points, or 0.22 per cent, to 1,335.54. The Nasdaq Composite Index advanced 8.63 points, or 0.31 per cent, to 2,799.82.
Stocks also got a lift from the president of the Atlanta Federal Reserve Bank, Dennis Lockhart, who said the Fed will complete its $600bn bond-buying plan as scheduled at the end of June. He said he does not see any reason to end the programme early.
The percentage of US stock market bulls rose to the highest level in nearly four months as equities continue to recover from their recent fall, according to a weekly survey of advisers by Investors Intelligence.
Broadcom shares gained 3.9 per cent to $39.95 after Oppenheimer raised its rating on the chipmaker’s stock and set a price target of $55.
In earnings news, global agribusiness Monsanto said net income jumped about 15 per cent in the second-quarter on strong sales of corn seed for spring planting and improved profit margins. But its stock fell 5.7 per cent to $69.16 after the world’s largest seed company did not raise its full-year outlook.