US Stocks Get a Lift From Earnings; Berkshire Boosts Banks
U.S. stocks are rising Monday as Warren Buffett’s Berkshire Hathaway leads financial companies higher. Media and technology companies are also making gains and so are retailers. The S&P 500 index is on track for its highest close since late January.
KEEPING SCORE: The S&P 500 index rose 10 points, or 0.4 percent, to 2,850 at closing time. The benchmark index has risen for five weeks in a row, its longest winning streak in 2018. It’s on track for its highest close since Jan. 29.
The Dow Jones Industrial Average gained 40 points, or 0.2 percent, to 25,503. The Nasdaq composite added 48 points, or 0.6 percent, to 7,860. The Russell 2000 index of smaller-company stocks picked up 9 points, or 0.6 percent, to 1,682.
RIDING HIGHER: Results for Warren Buffett’s Berkshire Hathaway conglomerate were stronger than analysts expected and the company’s Class B shares climbed 3.2 percent to $206.55.
Tyson Foods gained 2.8 percent to $59.36. The poultry and pork processor cut its profit forecast last week in part because of uncertainty surrounding trade policy and rising freight costs. But it gave no sign things are getting worse. The stock is down 27 percent this year.
Construction and technical services company Jacobs Engineering jumped 8 percent to $72.51 after it gave a strong forecast for its next fiscal year.
THE QUOTE: Company profits have rocketed higher this year thanks to the corporate tax cut and continued economic growth. But in the first quarter investors didn’t always react to that growth because they were worried about the U.S. numerous ‘ trade disputes. Julian Emanuel, chief equity and derivative strategist for BTIG, said that’s starting to change.
“The skepticism that we had a quarter ago seems, rightly, to be falling by the wayside,” he said. “There is a hope and there is an expectation… that you are going to favorably resolve the trade issues.”
Emanuel said the S&P 500 could be at 3,000 right now if not for the ongoing trade disputes, and the index could get there if the trade worries get worked out soon. But he warned that stocks could become volatile this fall if progress isn’t made.
TAKING LOSSES: Consumer products company Newell Brands dropped 13.9 percent to $22.88. The company said the liquidation of Toys R Us hurt its baby products business and its writing products unit also struggled. Newell has been selling off assets including its Rawlings sporting goods business.
Sotheby’s auction house slid 5.4 percent to $50.05 after its profit fell short of investor projections. The company said its business was hurt by price guarantees that made some auctions less profitable.
NOT GOING RITE: Rite Aid plunged 9.8 percent to $1.66 after it forecast a bigger loss for the year because generic drug pricing isn’t shaping up the way it expected.
Later this week shareholders will vote on the proposed sale of Rite Aid to the Albertsons grocery store chain. The owner of Safeway agreed to buy Rite Aid in February, but two shareholder advisory firms and one major Rite Aid shareholder opposed the deal.
IN WITH THE NEW, OUT WITH NOOYI: PepsiCo said Indra Nooyi will step down as its CEO in October after 12 years leading the company. Ramon Laguarta, Pepsi’s head of corporate strategy, will become its next CEO. The stock rose 1.2 percent to $117.64.
After 12 years, @IndraNooyi is stepping down as our CEO. Take a look back at some of the accomplishments that were achieved through her leadership and vision: https://t.co/WtnWbVD4It pic.twitter.com/IGCKNk4RT9
— PepsiCo (@PepsiCo) August 6, 2018
ENERGY: Oil futures gave up most of an early gain, but they still finished higher. Benchmark U.S. crude gained 0.8 percent to $69.01 a barrel in New York. Brent crude, used to price international oils, rose 0.7 percent to $73.75 a barrel in London.
Wholesale gasoline remained at $2.13 a gallon. Heating oil climbed 0.6 percent to $2.14 a gallon. Natural gas added 0.2 percent to $2.86 per 1,000 cubic feet.
CURRENCIES: Regulators in China tightened controls on trading in the yuan in a possible effort to stop its decline against the dollar. The yuan has drifted lower against the dollar since February, which could help exporters that face higher U.S. tariffs but also raises the risk of capital flowing out of the economy.
The British pound weakened after the U.K.’s trade minister warned that the country risks leaving the European Union without a deal to avoid tariffs and other trade barriers. The currency fell to $1.2939, its lowest in almost a year, from $1.3007 on Friday.
The dollar rose to 111.40 yen from 111.23 yen. The euro fell to $1.1555 from $1.1578.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.94 percent from 2.95 percent.
METALS: Gold fell 0.4 percent to $1,217.70 an ounce. Silver dipped 0.7 percent to $15.35 an ounce. Copper lost 1.2 percent to $2.73 a pound.
OVERSEAS: Germany’s DAX lost 0.1 percent and while London’s FTSE 100 added 0.1 percent. France’s CAC 40 fell less than 0.1 percent.
Tokyo’s Nikkei 225 fell 0.1 percent. Hong Kong’s Hang Seng added 0.5 percent and Seoul’s Kospi was dipped less than 0.1 percent.
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