By Saumya Vaishampayan
U.S. stocks gave up early gains to trade little changed Monday,
with the S&P 500 and Nasdaq Composite hovering near all-time
highs.
The Dow Jones Industrial Average lost two points to 18078 and
the S&P 500 slipped three points, or 0.1%, to 2114,
The Nasdaq Composite lost 17 points, or 0.3%, to 5076. Both
indexes were higher earlier in the session.
Recent strength in the tech sector had spilled over into the
broader market, helping propel the S&P to a fresh record
Friday. That petered out Monday after the open, said Larry Weiss,
head of trading at Instinet. "There's not too much going on," he
said. "We're drifting off those levels on exhaustion."
Gains in DuPont Co. and Apple Inc. helped keep the Dow near the
flatline.
Influential proxy adviser Institutional Shareholder Services
Inc. said DuPont Co. shareholders should elect Nelson Peltz and
John Myers to the company's board. They were two of the four
nominees Mr. Peltz's Trian Fund Management LP had put forward in
the fight to shake up the chemical giant. DuPont shares rose 4.3%.
Materials stocks in the S&P, a group that includes DuPont,
advanced 1.2%.
Apple shares rose 2%. The tech company reports earnings after
the bell.
The S&P and Nasdaq both closed at records Friday, marking
the sixth for the S&P and the second for the Nasdaq this year.
The Dow ended 1.1% below its record close on Friday.
Earnings will continue to stream in this week and several
economic reports are scheduled for release, including the first
reading on first-quarter U.S. economic growth, consumer spending
for March and the Federal Reserve's preferred inflation gauge. The
Fed's statement on monetary policy, due Wednesday, will also
attract attention this week.
Upbeat technology earnings helped the Nasdaq surpass its
15-year-old record last week. Including results from 201 companies
in the S&P 500, earnings are on track to decline 2.8% from a
year earlier, according to FactSet. A decline in year-over-year
earnings in the first quarter would be the first since the third
quarter of 2012, when earnings fell 1%.
Going into the reporting season, analysts slashed forecasts as
they expected the strong dollar and weak oil prices to weigh on
profits and revenues. About 73% of companies have beat those
lowered profit expectations, while just 47% of companies have
topped revenue estimates, according to FactSet.
"There's very little inflation and usually inflation helps with
revenue growth" as people are less likely to postpone purchases in
a high-inflation environment, said Sam Stovall, U.S. equity
strategist at S&P Capital IQ.
"This bull market does have legs, but we're getting a bit
vulnerable to a correction," said Mr. Stovall. "Because interest
rates are so low, inflation is so low...there are not a lot of
alternatives to equities."
European stocks rose after Greece reshuffled its team for
bailout negotiations. France's CAC 40 gained 1.3% and Germany's DAX
rallied 1.9%. Time is running out for Greece and its creditors to
reach a new bailout deal, with the loans Greece owes to the
International Monetary Fund due in early May.
In other corporate news, Applied Materials Inc. and Tokyo
Electron Ltd. said they would abandon their plan to merge, citing
problems with the U.S. Department of Justice. The deal was unveiled
in September 2013 and would have created a company with an
estimated market value of $29 billion. Shares of Applied Materials
fell 7.1%.
Mylan NV's board rejected Teva Pharmaceutical Industries Ltd.'s
unsolicited bid . Mylan shares fell 5.3% and those of Teva slipped
3.1%.
In commodity markets, gold futures rose 2.4% to $1203.50 an
ounce. Crude-oil futures added 0.2% to $57.29 a barrel. Treasury
prices fell, pushing the 10-year yield up to 1.932% from 1.917% on
Friday.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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