Stocks are little changed after record week
NEW YORK • Bank of America led a rally in big-bank stocks Monday in a mostly quiet trading day. Stock indexes were little changed following a record-setting week.
News that Bank of America and MBIA, a bond-insurance company, had reached a settlement over a long-running dispute sent both companies' stocks up. The Wall Street Journal reported that BofA will pay $1.7 billion to MBIA and also extend the troubled company a credit line.
MBIA soared 40 percent, or $4, to $13.82. Bank of America gained 5 percent, or 57 cents, to $12.81, making it the leader of the 30 companies in the Dow Jones industrial average.
No major economic reports came out Monday, but a few companies reported earnings. Tyson Foods, the nation's largest meat-processing company, fell 4 percent, the biggest drop in the Standard & Poor's 500 index. Tyson's quarterly net income sank 42 percent as costs for chicken feed rose. The company's stock lost $1.03 to $23.90.
Companies have reported solid quarterly profits so far this earnings season. Seven of every 10 big companies in the S&P 500 have beat Wall Street's earnings estimates. But revenue has looked weak.
"Yet again, corporations continue to do more with less," said Dan Veru, the chief investment officer of Palisade Capital Management.
Veru said the trend is likely to lead to more mergers in the coming months, as cash-rich companies look for ways to raise their revenue. A wave of mergers could shift the stock market's rally into a higher gear, he said.
Shortly after 1 p.m., the Dow was down 1 point at 14,972.
The S&P 500 index edged up three points to 1,617, an increase of 0.2 percent. The Nasdaq composite rose 13 points to 3,392, an increase of 0.4 percent. Half of the 10 industry groups in the S&P 500 crept higher.
The stock market cleared new milestones on Friday after the government reported that employers added more workers to their payrolls in recent months. The unemployment rate fell to 7.5 percent, the lowest level in four years.
The news sent the Dow through the 15,000 mark for the first time, while the S&P 500 closed above 1,600, another first.
Among other companies reporting quarterly results on Monday, Sysco posted net income and revenue that fell short of analysts' estimates. The food distributor's CEO said the company's sales were held back by bad weather that made people less willing to spend on meals away from home. Sysco's stock dropped 1 percent, or 34 cents, to $34.32.
Monster Beverage sank 2 percent after San Francisco's city attorney sued the company for allegedly marketing its caffeinated drinks to children. Last week, Monster Beverage filed a suit against the same city attorney over demands that the energy drink maker reduce the caffeine in its drinks and change its marketing practices. Monster lost $1.10 to $56.34.
In other trading, the price of crude oil edged up 25 cents to $95.88 and gold was little changed at $1,464 an ounce. The yield on the 10-year note was trading at 1.75 percent, up from 1.74 percent late Friday.