US stocks notched modest gains on Monday as investors sifted through mixed earnings and a weak index of housing sentiment to pin their hopes on strong quarterly reports later this week.
Better-than-expected earnings from Halliburton helped lift energy stocks, while reports from toy maker Hasbro and Delta Airlines sent their shares falling. But the day's round of earnings did little to budge the market out of its narrow trading range. Investors said they planned to wait and see if big-name companies' reports and results of the European bank stress tests later this week cemented a market movement.
Market watchers said financial companies still carry added significance for the market, though most investors are anticipating major banks' trading revenues to decline.
The Dow Jones Industrial Average rose 56.53 points (0.56%) to 10,154, erasing a fraction of its sharp decline last Friday, when the measure plunged 261 points in its biggest drop of the month. Leading the Dow's gains, Intel rose 57 cents (2.7%) to $21.59 on the Nasdaq. Boeing added $1.28 (2.1%) to $63.18, after saying the market for commercial aircraft is back as it announced an order for 30 of its 777 jets.
However, Bank of America extended its Friday losses after reporting disappointing second-quarter revenue, sliding an additional 37 cents (2.7%) to $13.61.
The Nasdaq Composite gained 19.18 (0.88%) to 2,198.23. The Standard & Poor's 500-share index added 6.37 (0.60%) to 1,071.25, with all of its sectors in the black.
Energy stocks were boosted by better-than-expected earnings from oilfield services company Halliburton. Shares of the oilfield services company rose $1.66 (6%) to $29.17, after its second-quarter earnings rose 83%, helped by a recovery in North American operations and an 11% sequential rise in international revenue. Rival oil services companies benefited from the report, including Schlumberger, which rose $2.47 (4.4%) to $59.15 and Baker Hughes, up $1.70 (3.7%) to $47.70.
Among other companies reporting earnings, toy maker Hasbro slipped 15 cents (0.4%) to $39.35 after it posted a surprise 11% second-quarter profit, but revenue fell more than anticipated.
And airline carriers weakened after Delta Air Lines swung to a second-quarter profit, topping analysts' expectations, but announced plans to add more flights, sparking fears of a price war between carriers. Shares of Delta slid 34 cents (2.9%) to $11.38, while Southwest Airlines shed 26 cents (2.2%) to $11.50, and AMR, parent of American Airlines, dropped 13 cents (1.9%) to $6.74.
Motorola climbed 42 cents (5.6%) to $7.92, after telecom equipment vendor Nokia Siemens Networks, a joint venture between Finland's Nokia and Germany's Siemens AG, said it has agreed to pay $1.2bn for the majority of US-based Motorola's network equipment business in order to gain a stronger foothold in the important North American and Japanese markets.
Biotechnology drug company Amgen added $1.43 (2.7%) to $53.60, after the US Food and Drug Administration agreed to a priority review for denosumab, its drug to prevent skeletal problems in cancer patients. The FDA is scheduled to decide whether to approve the drug by Nov. 18.
Generic drug maker Mylan rose 40 cents (2.3%) to $18.11, after receiving final approval from the US Food and Drug Administration for its abbreviated new drug application for Clonidine Transdermal System USP, a generic treatment for hypertension.
For Australian ADRs listed on the NYSE, BHP Billiton climbed 50 cents (0.76%) to US$66.03, Rio Tinto Plc increased 78 cents (1.7%) to US$46.54, ResMed lost $1.75 (2.63%) to US$64.71, Telstra Corporation strengthened 17 cents (1.21%) to US$14.21, Telecom Corporation of NZ gained 3 cents (0.45%) to US$6.71 and Westpac advanced 31 cents (0.32%) to US$96.12.
In economic news, rattled by economic conditions and the expiration of a government subsidy for home buyers, US builder confidence in July sank to its lowest level in more than a year, casting doubt on the housing sector's recovery.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.96% and the five year yield was 1.70%.
A survey showing growing pessimism among US homebuilders rekindled economic worries on Monday and prompted traders to sell European stocks.
The Stoxx Europe 600 index ended down 0.8% at 246.18. The index gave up its earlier gains after a monthly survey found homebuilders grew more pessimistic in July.
France's CAC-40 index fell 0.4% to 3,486.33 and the UK FTSE 100 index dropped 0.2% to 5,148.28. Germany's DAX index slipped 0.5% to 6,009.11.
Shares of Royal Philips Electronics fell 3.6% after it reported a surge in second-quarter profit to EUR262m, but warned sales growth will slow in the second half of the year.
Electrolux dropped 7.8%, after the Swedish electrical appliance maker said its second-quarter sales slipped 0.6%.
Oil giant BP fell 4.7%. BP's talks to sell half its Prudhoe Bay stake to Apache stalled twice over the weekend, a news source reported, citing a person familiar with the matter. The firm said on Monday that the cost of the response to the oil spill in the Gulf of Mexico to date amounts to approximately $3.95bn. The government is also concerned about seeping gas from the well it has temporarily capped.
The utilities sector advanced on Monday, boosted by a 10.5% advance for UK electricity generator International Power after the disclosure of deal talks that would see France's GDF Suez sell most of its overseas assets in return for a stake in the UK-listed firm. GDF Suez shares rose 0.7%.
European aircraft maker Airbus announced more than $9bn worth of orders for its best-selling A320 family jets from two leasing companies. Shares of EADS, the parent of Airbus, gained 0.8%.
On the FTSE 100, Rio Tinto increased 43.50 pence (1.45%) to 3,134.50 pence and BHP Billiton improved 5.00 pence (0.28%) to 1,820.06 pence.
Most Asian markets dropped on Monday after steep losses on Wall Street prompted selling, though the magnitude of the fall was limited by a strong rebound for Chinese stocks and merger-and-acquisition news.
Hong Kong's Hang Seng Index shed 0.8%, Japanese markets were shut for Marine Day, while the Shanghai Composite bucked the trend to jump 2.1% as banking, property and consumer stocks rose on hopes that Beijing may not introduce more restrictive policies after several indicators showed last week the economy was cooling.
New Zealand shares ended lower with investor sentiment weighed down by weak offshore markets, although a takeover bid from Olam International for NZ Farming Systems Uruguay sparked some interest. The benchmark NZX-50 shed 0.7%, or 21.15 points, to 2,964.61 points.
Base metals on the LME finished mixed. Aluminium rose $5 (0.25%) to $1,970 while copper firmed $36 (0.56%) to $6,515 and nickel fell $140 (0.74%) to $18,800. Zinc added $25 (1.40%) to $1,810 and lead strengthened $10 (0.56%) to $1,780. Comex copper was last quoted at 293.60 US cents per pound.
Gold futures fell to their lowest levels since late May as stability in other markets reduced the demand for an alternative asset. Spot gold was last quoted at $1,180.35. Comex gold futures shed $6.30 (0.53%) to $1,181.90. Spot silver was last quoted at $17.56.
Crude-oil settled higher on Monday, erasing losses from late last week as US equities markets rose. West Texas Intermediate was last quoted at US$76.54 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.7727 euros, 86.77 yen, 1.152 AUD and 65.70 pence.