COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

Stocks rise as investors weigh earnings

Stock prices were slightly higher Monday despite weak earnings by McDonald’s and a drop in existing home sales.

The Dow Jones industrial average gained 1.81 points to 15,545.55, slightly below an all-time closing high. The Nasdaq composite index rose 12.77 points to 3,600.39, and the S&P 500 stock index was up 3.44 points to an all-time high of 1,695.53.

McDonald's (NYSE: MCD) reported disappointing revenue and profits in the past three months, leading the stock price down $2.69 to $97.58.

The National Association of Realtors reported that sales of previously owned homes fell by 1.2 percent in June to an annualized rate of 5.08 million units, the second-highest reading since November 2009. The median price for a home sold last month was $214,200, up 13.5 percent from June 2012.

Gold closed above $1,300 an ounce for the first time in five weeks Monday. The metal finished at $1,336, up $43.10. Oil was down $1.14 to $106.91 a barrel.

Financial companies climbed the most among 10 industries in the Standard & Poor’s 500 Index as Bank of America Corp. (NYSE: BAC) added 1.2 percent. Newmont Mining Corp. (NYSE: NEM) jumped 5.8 percent, leading gains among gold producers, as the metal’s price surged the most in a year.

Yahoo Inc. (Nasdaq: YHOO) dropped 4.3 percent to $27.86 after announcing activist investor Daniel Loeb is leaving the board.

Homebuilders fell, with D.R. Horton Inc. (NYSE: DHI) losing 2.2 percent, as sales of previously owned houses unexpectedly dropped in June.

The S&P 500 rallied 0.7 percent last week to a record, after better-than-forecast earnings. Federal Reserve Chairman Ben Bernanke said the central bank remains flexible about the duration of its asset-purchase program.

Fed stimulus has helped fuel a surge in stocks worldwide, with the S&P 500 jumping 151 percent from its March 2009 low.

Investors have increasingly turned to stocks this month, as U.S. equity exchange-traded funds are getting money at the fastest rate since September 2008. After adding $10.2 billion to ETFs last week, the July total stands at $29.7 billion, according to data compiled by Bloomberg.

Mutual funds that invest in U.S. equities had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals.

Individuals have 69 percent of their assets in mutual funds, almost a percentage point more than the average since 1992 and four points more than in 2012, Goldman Sachs Group Inc. said in a note to clients.

The broadest rally in U.S. stocks since at least 1990 has lifted shares of everything from the smallest companies to the biggest banks, signaling the bull market for America’s largest corporations will last at least until the end of the year, if history is a guide.

The S&P 500’s advance to a record last week coincided with highs in the Russell 2000 Index of smaller companies, the Dow Jones Transportation Index, the S&P 500 Financials Index and a gauge of economically sensitive equities overseen by Morgan Stanley. Since 1990, the S&P 500 has gained for six months on average after those measures peaked, according to data compiled by Bloomberg.

Newmont, the biggest U.S. gold producer, climbed 5.8 percent to $30.35. Barrick Gold Corp., (NYSE: ABX) the world’s largest gold miner, jumped 6.2 percent to $17.56. Bullion futures rose above $1,300 an ounce in New York for the biggest gain in more than a year as speculation the Fed will maintain stimulus spurred demand for the metal.

Hasbro Inc. (Nasdaq: HAS) added 3.3 percent to $46.87 as higher sales in its games unit offset quarterly results that trailed estimates.

Federal-Mogul Corp. (Nasdaq: FDML) surged 31 percent, the most since October 2008, to $13.95. The auto-parts maker controlled by investor Carl Icahn returned to a profit in the second quarter.

Gannett Co. (NYSE: GCI) dropped 1.9 percent to $25.87. The publisher of USA Today said second-quarter sales slipped less than 1 percent after print ads continued to slump, even as licensing for its TV stations gained 62 percent from a year earlier.

DreamWorks Animation SKG Inc. (Nasdaq: DWA) fell 4.5 percent to $23.77.

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