New York: The S&P 500 inched forward on relatively light volume on Wednesday, with investors adding selectively to winning positions, this time in technology, avoiding large bets ahead of earnings.
After days of struggling, the broader market index broke above the closely watched 1,333 level. The next closely watched technical point is 1,344, the high dating to June 2008.
“It would be tough (to break above 1,344). We might go near that before the earnings since I think earnings will be mostly ‘sell on the news’,” said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
It has now been nine trading days since the S&P 500 rose or fell more than 0.7%, a sign of relative calm amid few trading catalysts. Volume was 7.29 billion on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with last year’s estimated daily average of 8.47 billion.
Markets derived some comfort from Tuesday’s comments from Cisco chief executive John Chambers. Cisco Systems Inc shares rose 4.9% to $18.07 after Chambers admitted on Tuesday the one-time technology bellwether and Wall Street darling has lost its way and will need to restore its credibility.
“This applies not only to Cisco but to many big tech names. The blue chips are still reasonably priced and we see a potential of these stocks leading higher.”
The PHLX semiconductor index gained 1.5%.
Hewlett-Packard Co shares rose 2.2% to $41.18. Microsoft Corp rose 1.4% to $26.15.
The Dow Jones industrial average rose 32.85 points, or 0.27%, to close at 12,426.75. The Standard & Poor’s 500 Index gained 2.91 points, or 0.22%, to 1,335.54. The Nasdaq Composite Index advanced 8.63 points, or 0.31%, to 2,799.82.
Stocks also got a lift from the president of the Atlanta Federal Reserve Bank, Dennis Lockhart, who said the Fed will complete its $600 billion bond-buying plan as scheduled at the end of June. He said he does not see any reason to end the program early.
The percentage of US stock market bulls rose to the highest level in nearly four months as equities continue to recover from their recent fall, according to a weekly survey of advisers by Investors Intelligence.
Broadcom Corp shares gained 3.9% to $39.95 after Oppenheimer raised its rating on the chipmaker’s stock and set a price target of $55.
In earnings news, global agribusiness Monsanto Co said net income jumped about 15% in the second quarter on strong sales of corn seed for spring planting and improved profit margins.
But its stock fell 5.7% to $69.16 after the world’s largest seed company did not raise its full-year outlook.