By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Investors shrug off disappointing trade data from China
NEW YORK (MarketWatch) -- U.S. stocks edged higher on Monday as
investors readied for the rollout of earnings from large banks and
brushed aside disappointing trade reports from China that suggested
weakening global growth.
The S&P 500 (SPX) was up 4 points, or 0.2%, to 2,106.18,
with six of its 10 main sectors trading higher.
The Dow Jones Industrial Average (DJI) added 37 points, or 0.3%,
to 18,094, with more than half of its 30 components showing
gains.
The Nasdaq Composite (RIXF) rose 23 points, or 0.5%, to
5,018.9.
Meanwhile, a measure of smaller companies, known as the Russell
2000 (RUT), added 2 points, or 0.2%, to 1,267.35, setting an
all-time high. The index of small-cap companies outperformed the
S&P 500 year-to-date, rising 5.2%, compared with 2.3% gain for
the large-caps.
Peter Cardillo, chief market economist at Rockwell Global
Capital, sounded a cautious note about the market going into the
earnings season.
"Markets are at high levels and earnings are not going to be
great and that can induce a pullback. We would not be surprised to
see a pullback up to 8%-10%," Cardillo said.
On Monday, Asia stocks shrugged off data that showed exports in
China falling
(http://www.marketwatch.com/story/china-trade-slumps-on-weak-demand-2015-04-12-234854516)
by the most since February of last year, a 15% drop. The Hong Kong
Hang Seng Index and the Shanghai Composite Index hit new seven-year
highs, though some believe the stock surge may end in tears
(http://www.marketwatch.com/story/chinas-stock-connect-more-boom-and-bust-2015-04-12).
But weak China data have spurred expectations that another
devaluation out of Beijing could be coming, said Nour Al-Hammoury,
chief market strategist at ADS Securities in Abu Dhabi, in a
note.
He said volatility will be on the rise for stocks and many will
be watching how the market handles continued gains for the dollar
(http://www.marketwatch.com/story/dollars-rising-trend-remains-intact-amid-weak-china-data-2015-04-13-2103105)(DXY),
which also got a lift from data pointing to weakening trade from
the China.
Though the falling commodities and strengthening dollar are
going to be headwinds for many multinational companies, it
shouldn't be all doom and gloom, according to Eric Mintz, portfolio
manager at Eagle Asset Management.
"Stock prices will move higher when commodities move higher and
we think oil prices have bottomed and will be higher by the end of
the year, as the futures curve indicates. So, despite expectations
of a drop in earnings, stocks will do fine and grind higher," Mintz
said.
Also read: 'Stock Connect' buyers stay out of Hong Kong blue
chips ()
Europe stocks (http://www.marketwatch.com/storyno-meta-for-guid)
were marginally higher, though the FTSE 100 index
(http://www.marketwatch.com/story/ftse-100-eases-from-record-with-bhp-hurt-after-downgrade-2015-04-13)
eased back as miners got hit by a downgrade of the iron-ore sector,
and weak China data weighed.
The only item on the U.S. data calendar is the federal budget
for March, due at 2 p.m. Eastern Time.
Earnings lining up for stocks: Earnings season shifts into high
gear this week with J.P. Morgan Chase & Co.(JPM) due to report,
along with Wells Fargo & Co.(WFC) and Johnson &
Johnson(JNJ) Tuesday morning before the market opens. The rest of
the week will see other big banks roll out.
Read: B. of A. results crucial to financial sector earnings
gains
(http://www.marketwatch.com/story/b-of-a-results-crucial-to-financial-sector-earnings-gains-2015-04-12)
Pep Boys--Manny Moe and Jack(PBY) will report after trading
closes on Monday, along with Layne Christensen Co.(LAYN)
Shares of Qualcomm Inc.(QCOM) jumped 2.4% after The Wall Street
Journal
(http://www.marketwatch.com/story/activist-buys-big-stake-in-qualcomm-2015-04-13-04852655)
reported that activist investor Jana Partners LLC is pressuring the
chip maker to consider a breakup and other options to boost its
weak share price.
Shares of Builders FirstSource, Inc.(BLDR) jumped 52% after the
company announced plans to buy ProBuild.
Other markets:Crude-oil prices
(http://www.marketwatch.com/storyno-meta-for-guid)(CLK5) pushed
higher on Monday, while gold (GCK5) pulled back as the dollar
rose.
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