From The Associated Press
NEW YORK —
The Dow Jones industrial average held above 15,000 a day after it closed above the landmark level for the first time.
On Wednesday, a day without any major economic releases, investors focused on company earnings as reporting for the first quarter draws to a close. Although earnings growth has slowed from last quarter, profits are at record levels and projected to rise throughout the year.
Internet company AOL plunged as its subscription revenues fell and hamburger chain Wendy’s slumped after it reported revenues that fell short of Wall Street’s expectations. On the positive side, high-end grocer Whole Foods and the video game publisher Electronic Arts rose sharply after predicting full-year profits that were higher than analysts were expecting.
Scott Wren, a senior equity strategist at Wells Fargo Advisors, predicted more gains in the short term for the market but said a pullback was likely at some point as the rise in prices begins to overstate the improvement in the outlook for the economy.
“We’re still going to keep grinding higher,” says Wren. But “I do think the market is ahead of itself.”
Stocks have also defied expectations that a sell-off would follow the spring surge as signs emerged that growth could be set for a slowdown. Both the Dow and the Standard & Poor’s 500 index have gained every month of the year and are trading at record highs.
AOL plunged $3.66, or 8.8 percent, to $37.76 after the company reported earnings that fell short of the forecasts of Wall Street analysts who follow the stock. Subscription revenue fell 9 percent.
Wendy’s fell 43 cents, or 5.7 percent, to $5.77 after reported a 2 percent rise in revenue to $603.7 million, short of the $615 million forecast of analysts.
Information technology companies gained the most of the 10 industry groups in the S&P 500 index, rising 0.7 percent. Technology companies have surged 6 percent in the last month and are finding favor with investors after lagging the index for the first three months of the year.
The Dow was up 27 points, or 0.2 percent, at 15,084 as of 3:20 p.m. Eastern Daylight Time. The index is 15.1 percent higher for the year. The S&P 500 index was four points higher, or 0.2 percent, at 1,630, extending its advance for 2013 to 14.3 percent.
While stocks have surged this year, the economic recovery has been plodding. That has left some analysts predicting a pullback, or at least a slowdown for the market.
“Bad things happen when markets go straight up,” said Jim Russell, a regional investment director at U.S. Bank. “We’d like to see the market take a breather, consolidate gains, and resume a modest upward glide path in the weeks ahead.”
Financial analysts predict that earnings for S&P 500 companies will end up rising 5.1 percent versus the same period a year ago, according to S&P Capital IQ. Although that’s slower growth than the 7.7 percent growth of the previous quarter, earnings are expected to grow 12 percent by the fourth quarter of 2013.
Whole Foods climbed $9.20, or 9.9 percent, to $102 after the natural foods store chain said its fiscal second-quarter net income rose 20 percent. The company also raised its profit forecast for the full year.
Electronic Arts, which makes the Madden Football games and SimCity, jumped $2.72, or 14.8 percent, to $21.13 after it projected profits for the current fiscal year that were higher than analysts were expecting.
In other trading, the Nasdaq composite gained 12 points, or 0.4 percent, to 3,409. The Russell 2000, an index of smaller stocks, fell two points, or 0.2 percent, to 965.43.
Freight transporter C.H. Robinson Worldwide was the biggest decliner in the S&P 500 index, falling $4.31, or 7 percent, to $57.27 after the company said that its profit margins were being squeezed.
In government bond trading, the yield on the 10-year Treasury note was little changed at 1.77 percent. The yield has climbed from 1.63, its lowest of the year, last week after a surprisingly strong employment report Friday.
In commodities trading, the price of crude oil rose $1, or 1 percent, to $96.62 a barrel and gold climbed $24.90, or 1.7 percent, to $1,473.70 an ounce.
The dollar fell against the euro and the yen.