Dow hits 11,000 ahead of earnings season
The Dow Jones Industrial Average on Monday closed above 11,000 for the first time since late September 2008, with the other main indices also recording modest gains.
Investors mostly shrugged off the news about the Greek rescue package as they looked forward to the start of the new earnings season that aluminium producer Alcoa was set to kick off after the session closed.
“The markets will be looking closely at the top and the bottom line [of the earnings results] to gauge how far along in this recovery we are,” said Brad Sorenson, director of market and sector analysis at Schwab Center for Financial Research.
After the closing bell, the S&P 500 was up 0.2 per cent at 1,196.48 the Dow Jones Industrial Average had added 0.1 per cent to 11,005.97 and the Nasdaq Composite was 0.2 per cent higher at 2,457.87.
However, some analysts fear the markets could be set for a correction. “It would appear that just as individual investors have begun to show signs of warming up to equities, professional investors are showing greater nervousness as they consider where the markets are headed after arriving at 18-month and 19-month highs last week,” wrote John Stoltzfus, analyst at Ticonderoga Securities.
Alcoa was 1.3 per cent higher at $14.57 ahead of its quarterly earnings.
Electricity producer Mirant Corp strengthened 18.2 per cent to $12.68 as it announced a merger with RRI Energy in a $1.6bn stock transaction. The merger is aimed at cutting costs and taking advantage of rising power prices. RRI Energy was up 14.7 per cent to $4.53.
Palm, a maker of smartphones, was up 17.1 per cent to $6.04 on reports that the company was looking to sell itself and was seeking bids as soon as this week.
A-shares in Berkshire Hathaway, an insurance and investment conglomerate headed by Warren Buffett, lost 0.5 per cent to $120,465 while the B-shares were flat at $80.48 as Barclays Capital initiated coverage on the stock with an “equal weight” rating. Price targets for the A and B shares were $132,000 and $88, respectively.
