U.S. stocks fluctuated, after the longest streak of weekly gains since February, as investors awaited retailer earnings reports to gauge the strength of consumer demand and the likelihood of cuts to monetary stimulus.
Transocean Ltd. added 3.9% after the offshore rig contractor agreed with investor Carl Icahn to propose a $3 per share dividend. ViroPharma Inc. jumped 26% as Shire Plc. bought the company for about $4.2 billion. Best Buy Co. rose 4% after a UBS AG analyst upgraded the stock. D.R. Horton Inc. slid 1.7% as homebuilder stocks dropped for a third day. KKR & Co. fell 1.5% after it bought Brickman Group Ltd. for $1.6 billion.
The S&P 500 added less than 1 point to 1,771.05 at 2:51 p.m. in New York, within one point of its record. The Dow Jones Industrial Average climbed 11.05 points, or 0.1%, to 15,772.83, headed for a record close. Trading in S&P 500 stocks was 24% below the 30-day average at this time of day. The U.S. bond market is closed because of the Veterans Day holiday.
“Today’s going to be very light because it’s a holiday for many people,” John Carey, a portfolio manager at Pioneer Investment Management who oversees $200 billion in assets globally, said by phone from Boston. “People will be watching over the next few weeks to see if the Fed does decide to begin tapering this year. If earnings continue trending higher the support will be there for better share prices.”
The S&P 500 added 0.5% last week for a fifth week of gains. Better-than-forecast data on jobs and growth indicated the economy is strong enough to withstand a reduction in Federal Reserve stimulus, even as consumer spending climbed last quarter at the slowest pace since 2011.
Corporate earnings that surpassed estimates and unprecedented monetary support from the Federal Reserve have propelled the S&P 500 higher by more than 160% from a March 2009 low.
Of the 447 S&P 500 companies that have released third- quarter profits so far, 75% have beaten analysts’ forecasts, data compiled by Bloomberg showed. Earnings per share for the companies on the gauge probably increased 4.7% in the third quarter, and will rise 6.2% in the fourth, according to estimates compiled by Bloomberg.
“We can put in the books that the third quarter earnings season was another positive surprise,” Phil Orlando, New York- based chief equity market strategist at Federated Investors, said by phone. His firm oversees about $380 billion in assets. “The market was way too pessimistic going in.”