Stocks move higher as earnings season kicks off
POSTED: Monday, July 8, 2013 - 7:46am
UPDATED: Monday, July 8, 2013 - 7:46am
NEW YORK (CNNMoney) — Stocks moved higher Monday, as investors bet that corporate earnings could give stocks another leg up.
Second quarter earnings season kicks off after the close of trading with results from aluminum producer Alcoa -- a Dow Jones Industrial Average component, whose earnings investors watch as a first-look indicator of how companies fared in the past quarter.
The Dow, the S&P 500 and the Nasdaq moved up between 0.4% and 0.5%.
Still, analysts aren't as sanguine about the prospects for growth and higher profits in corporate America.
"Sales have got to start coming through," said fund manager Fiona Harris from J.P. Morgan Asset Management. "We believe the relatively sluggish U.S. sales growth could start to weigh heavily if we don't see improvement soon."
Fed taper puts earnings in focus: Earnings are starting to matter more now to the stock market, as many investors and analysts expect the Fed to taper its bond buying program by year-end.
The Fed's bond buying has been the major catalyst for a stock market rally this year. All three indexes are up between 14% and 16% in 2013.
Earnings bonanza: Results are due later in the week from companies including Yum! Brands, JPMorgan and Wells Fargo.
Related: Fear & Greed Index shows investors still fearful
In economic news, the Federal Reserve is set to release its monthly report on consumer credit at 3 p.m. ET.
According to Kit Juckes of Societe Generale in London, among the issues standing out for global investors in the week ahead are a speech by Federal Reserve chairman Ben Bernanke's on Wednesday, a possible "Scotch tape solution" to Portugal's economic crisis and concerns about the slowdown in China's economy.
U.S. stocks finished higher Friday following a strong monthly jobs report. Investors seemed to set aside concerns about the Federal Reserve and focused on the improved outlook for economic growth.
European markets made strong advances in afternoon trading., gaining between 1.3% and 2.3%.
But Asian markets ended in the red. The Hang Seng index and the Nikkei in Japan both dropped by more than 1%. The Shanghai Composite index fell even further, down by 2.4%, on continuing concerns about slowing growth in China.
Shares of Asiana Airlines dropped in South Korean markets after a Boeing 777 crashed in San Francisco over the weekend. But the stock price for Boeing was little changed.
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