US stocks edged up on Monday, led by technology stocks, including Microsoft and SanDisk, following ratings upgrades from analysts, although jitters over second-quarter earnings reports and disappointing import data from China weighed on Alcoa and other materials stocks.
The Dow Jones Industrial Average climbed 18.24 points (0.18%) to 10,216.27, the measure's fifth-straight session in the black. This marks the DJIA's longest winning streak since a six-day run that ended April 26. Microsoft was the measure's best performer with a jump of 56 cents (2.3%) to $24.83. A broker raised its investment rating on the stock to buy from neutral, saying "it remains a significant cash flow generator trading at compelling levels."
However, the DJIA's material and industrial components were pulled lower after data showed Chinese imports slowed to a yearly growth rate of 34.1% in June from 48.3% in May. United Technologies declined 83 cents (1.2%) to $66.68, while DuPont slipped 38 cents (1%) to $36.52, Caterpillar dropped 44 cents (0.7%) to $64.28, and Alcoa fell 7 cents (0.6%) to $10.87.
Alcoa's decline also came ahead of its second-quarter earnings report as investors fretted that the stocks' jump of more than 9% last week may have boosted the stock a little too much ahead of its report. After the close, the aluminium giant reported second-quarter earnings a penny above analysts' estimates. Revenue also topped analysts' expectations, and the company raised its projection for aluminium consumption.
The Nasdaq Composite rose 1.91 (0.09%) to 2,198.36. The Standard & Poor's 500 index advanced 0.79 (0.07%) to 1,078.75. The technology sector led the gains, while the materials and industrials sectors led to the downside.
The technology sector's strength followed a number of upgrades from analysts. Yahoo, SanDisk and Qualcomm all joined Microsoft in receiving upgrades to their investment ratings from analysts. Yahoo edged up 5 cents (0.3%) to $14.94, while SanDisk added $2.91 (6.8%) to $45.81, and Qualcomm rose $1.19 (3.5%) to $35.10.
Aon Corp. fell $2.72 (7.1%) to $35.62, after the insurance broker agreed to buy human-resource consulting and outsourcing company Hewitt Associates in a cash-and-stock deal valued at about $4.9bn. The deal will nearly triple the size of Aon's consulting operations, making it a $4.3bn business by revenue. Hewitt's shares soared $11.39 (32%) to $46.79.
Weyerhaeuser climbed $3.02 (8.4%) to $38.86, after the forest-products company said it will distribute $5.6bn in retained earnings and profits to its shareholders in the form of a special dividend, a required step on the way to becoming a real-estate investment trust.
Canada's Pengrowth Corp. declined 70 cents (7%) to $9.25, after the company said it agreed to acquire Monterey Exploration Ltd., a Canadian junior oil and gas company in which it holds an 18% stake, to gain access to gas reserves in northeast British Columbia.
Shaw Group slipped 31 cents (0.9%) to $34.68. The engineering and construction firm's fiscal third-quarter earnings soared, with adjusted earnings topping analysts' estimates. However, its gross margin fell, and sales in the company's biggest business, fossil and nuclear, declined 11%.
For Australian ADRs listed on the NYSE, BHP Billiton declined $1.56 (2.3%) to US$66.28, Rio Tinto Plc slid $1.40 (2.9%) to US$46.89, ResMed increased 42 cents (0.65%) to US$65.35, Telstra Corporation firmed 2 cents (0.14%) to US$14.05, Telecom Corporation of NZ added 10 cents (1.46%) to US$6.94 and Westpac slipped 56 cents (0.57%) to US$96.97.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.06% and the five year yield was 1.85%.
European shares rose on Monday, with oil giant BP trading sharply higher amid deal speculation, and as investors awaited the start of the US second-quarter earnings season.
The Stoxx Europe 600 index gained 0.4% to 251.18 in a choppy session, with shares of oil major BP jumping 9.4% to 399 pence.
Monday's move for the index built on a 5.4% gain made last week, the best weekly performance in more than a year, as economic data, central-bank comments and some details on European bank stress tests boosted sentiment.
Aluminium giant Alcoa Inc. - set to report earnings after the close on Wall Street - unofficially kicks off the start of the US second-quarter earnings season.
Of the main regional benchmarks, the French CAC-40 index rose 0.4% to 3,567.66, the UK's FTSE 100 index closed up 0.7% at 5,167.02 and the German DAX index added 0.2% to 6,077.19.
Shares of BP climbed in London after the firm said that the installation of a new containment cap was proceeding as planned. The cap is intended to capture more of the oil that's been leaking into the Gulf of Mexico since an explosion on the Deepwater Horizon rig in April. Also, the Sunday Times newspaper reported, without citing sources, that BP management was in talks to sell up to $12bn of assets to Apache Corp., the US oil firm, including a big stake in Alaska's Prudhoe Bay. The newspaper further reported that Exxon Mobil was mulling a takeover bid for the company.
Also trading higher, Zodiac Aerospace shares climbed 7.1% to EUR42.62. The firm said over the weekend that it had received, and rejected, an approach from rival Safran, whose shares fell 2.6%. Safran said that it "acknowledges the reaction of Zodiac's board while remaining convinced of the obvious logic from an industrial and a strategic perspective."
Meanwhile, shares of German airport operator Fraport rose 2.6%. The company said the total number of passengers at its five majority-owned airports rose 11.8% during June to 9.2m, with cargo throughput up 27.5% from a year earlier.
On the FTSE 100, Rio Tinto slipped 70.00 pence (2.21%) to 3,102.50 pence and BHP Billiton weakened 27.50 pence (1.48%) to 1,852.76 pence.
Most Asian markets advanced as strong Chinese exports data and extended gains on Wall Street aided sentiment in the region.
The Nikkei Stock Average lost 0.4% to 9,548.11 in Tokyo, while China's Shanghai Composite gained 0.8% and Hong Kong's Hang Seng Index advanced 0.4%.
New Zealand shares ended slightly higher as investors were cheered by gains on Wall Street, although trading remained light due to a dearth of local drivers. The NZX-50 ended up 0.2%, or 6.78 points, at 3,012.03, with brokers saying the focus is now shifting to the corporate earnings season in the US.
Base metals on the London Metal Exchange ended lower after a day of thin trading in which data showing a drop in Chinese copper imports weighed heavily on sentiment. Aluminium fell $25 (1.25%) to $1,975 while copper weakened $90 (1.33%) to $6,655 and nickel dropped $325 (1.67%) to $19,150. Zinc shed $20 (1.06%) to $1,860 and lead lost $45 (2.45%) to $1,795. Comex copper was last quoted at 301.95 US cents per pound.
Gold futures slid as equity markets remained in a holding pattern ahead of the start of earnings season. Spot gold was last quoted at $1,196.05. Comex gold futures slipped $11.10 (0.92%) to $1,198.70. Spot silver was last quoted at $17.86.
Crude settled lower on Monday, staying well within its recent trading range ahead of important economic data later this week and the beginning of corporate earnings season. West Texas Intermediate was last quoted at US$74.95 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.7944 euros, 88.64 yen, 1.140 AUD and 66.58 pence.