NEW YORK (REUTERS) - United States (US) stocks advanced modestly on Monday in subdued trading as investors showed hesitation in the wake of a strong rally last week and before a slew of key earnings releases this week.
Monday's gain marked the S&P 500's fifth straight climb, its longest winning streak since October. The S&P 500 wrapped up its best week since July last week, boosted by results from such names as General Electric Co and Morgan Stanley.
The Nasdaq also scored its fifth straight gain on Monday.
Of the 87 companies in the S&P 500 that had reported results through Monday morning, 62.1 per cent have topped earnings expectations, according to Thomson Reuters data, compared with the 66 per cent average over the past four quarters. On the revenue side, 51.7 per cent have exceeded forecasts, below the 54 per cent average over the past four quarters.
S&P 500 companies' first-quarter earnings are projected to have increased 0.8 per cent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when profit growth was estimated at 6.5 per cent.
"We are certainly in a wait-and-see mode for earnings, which can be volatile, and therefore a lot of money is just waiting on the sidelines to see what happens," said Mr Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "Certainly, companies that confirm the rest of the year guidance, even if they miss the first quarter, it's a good thing because there is still a lot of expectation that we are going to see the economy begin to accelerate and also do some catch-up from the weather-impacted first quarter."
Volume was light, with about 4.34 billion shares traded on US exchanges, well below the 6.83 billion average so far this month, according to data from BATS Global Markets. Some market participants were away on Monday to observe Passover.
Halliburton Co added 3.3 per cent to close at US$62.92 after the oilfield services company reported earnings that beat expectations and gave a strong profit outlook. The PHLX oil service index rose 1 per cent.
SunTrust Banks gained 1.5 per cent to US$38.51 after its results. Toy maker Hasbro Inc rose 1.9 per cent to US$55.66 after its earnings beat expectations, though revenue was under forecasts.
The Dow Jones industrial average rose 40.71 points or 0.25 per cent, to end at 16,449.25. The S&P 500 gained 7.04 points or 0.38 per cent, to close at 1,871.89. The Nasdaq Composite added 26.03 points or 0.64 per cent, to finish at 4,121.546.
After the closing bell, Netflix Inc reported higher profit for the quarter that ended in March, boosted by the addition of 2.25 million customers to its movie and TV streaming service in the US. The stock shot up 6.8 per cent to US$372 in extended-hours trading. After a jump of 300 per cent in 2013, Netflix had slumped recently on concerns that the stock may be overvalued.
Dozens of S&P 500 components will report earnings this week, including such closely watched companies as Apple Inc, Biogen Idec and Facebook Inc. A number of Dow components, including McDonald's Corp, AT&T Inc, Procter & Gamble and Caterpillar Inc, will also report results.
More than 30 companies in the Nasdaq 100 are slated to report earnings, according to Nasdaq. The Nasdaq 100 represents more than half of the index's weight.
In company news, Britain's Sunday Times reported that Pfizer Inc had approached AstraZeneca to propose a US$101 billion (S$126 billion) takeover, an offer that was rejected. However, Astra's cancer drug pipeline is still considered a draw for Pfizer. Shares of Dow component Pfizer rose 2 per cent to US$30.86 while US-listed shares of AstraZeneca jumped 8.8 per cent to US$69.10.
Talks between Barrick Gold Corp and Newmont Mining Corp about a potential merger have hit a snag, but the companies remain keen to reach a deal and discussions are likely to resume, sources told Reuters.
Newmont's stock rose 6.4 per cent to US$25.05. It was the S&P 500's biggest percentage gainer. Barrick Gold's US-listed shares fell 3.9 per cent to close at US$17.28.
Advancing stocks outnumbered declining ones on the NYSE by 1,889 to 1,159, while on the Nasdaq, advancers beat decliners by 1,591 to 1,028.