Investors reassured by lower bond yields
NEW YORK » Wall Street edged higher in an erratic session yesterday as investors were reassured by a drop in Treasury bond yields yet still remained cautious as second-quarter earnings season kicks off this week.
Investors were looking to corporate earnings to help give the market some direction in the coming weeks. Reports had their unofficial start after the closing bell when aluminum producer Alcoa Inc. released results that matched analysts' projections.
In the meantime, Wall Street found some solace as the yield on the benchmark 10-year Treasury note dipped to 5.16 percent from 5.18 percent Friday. There had been some concern that the steady rise in bond yields since June would crimp dealmaking.
Buyout activity continued yesterday after Apollo Management LP's Hexion Specialty Chemicals Inc. raised its take-over bid for chemical company Huntsman Corp.; and Barron's said FedEx Corp. might be the target of a buyout.
A continuum of takeovers has given the stock market support in recent months. Shareholders of CBOT Holdings Inc. yesterday approved a merger with Chicago Mercantile Exchange Holdings Inc., a deal that will create the world's largest derivatives exchange.
"There's just not much earnings or economic news out there, and that has the market bobbing and weaving a little bit," said Jay Suskind, head trader at Ryan Beck & Co. "Overall, there's not a real catalyst to move the market one way or another, and I think the market will hover close to home."
The Dow Jones industrials rose 38.29, or 0.28 percent, to 13,649.97.
Broader market indexes were also higher. The Standard & Poor's 500 index rose 1.41, or 0.09 percent, to 1,531.85, and the Nasdaq composite index added 3.51, or 0.13 percent, to 2,670.02.
The Russell 2000 index of smaller companies rose 0.93, or 0.11 percent, to 853.24.
Advancing issues outpaced decliners by 4 to 3 on the New York Stock Exchange, where consolidated volume came to 2.68 billion shares, up from 2.39 billion on Friday.
A barrel of light sweet crude fell 62 cents to $72.19 on the New York Mercantile Exchange. The dollar was lower against other major currencies, while gold prices spiked.
Huntsman shares were up 7 cents at $28.07 after private equity firm Apollo Management raised its offer by 2.8 percent to $28 per share.
Alcoa, the world's second-largest aluminum producer, reported after the bell that second-quarter results fell about 4 percent but still matched analysts' projections. Shares closed up 70 cents at $42.36, but lost ground in after-hours electronic trading.
FedEx surged $5.33, or 4.8 percent, to $116.17 on a report the package delivery company could become a target for private equity buyers because of its modest valuation and turnaround potential, according to a report in Barron's.
CBOT shares fell $1.18 to $222.82 as shareholders voted on a combination with the Chicago Mercantile Exchange. CME shares fell $4.22 to $570.58. InterContinental Exchange Inc., which had also bid on the Chicago Board of Trade, rose 69 cents to $156.78.