Nasdaq edges to record high to open busy earnings week

Investors have taken their time until more solid earnings reports are posted before the across-the-board stock rally may be resumed.

THE QUOTE: “We’re focused on earnings and they’re coming in better”, said Quincy Krosby, a market strategist at Prudential Financial.

So far, 70 percent of companies have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994.

Gold weakened, dropping to the lowest level in five years, triggered by selling in Shanghai on Monday and a lack of liquidity. A almost three-week slump in oil prices deepened.

In late afternoon trading in New York, the Dow Jones Industrial Average added 0.18 percent, the Standard & Poor’s 500 Index rose 0.24 percent, while the Nasdaq Composite Index gained 0.38 percent. Bullard, who is scheduled to be a voting member of the policy-setting Federal Open Market Committee in 2016, had previously argued the Fed should start raising rates sooner rather than later and previous year was favouring a first move earlier in 2015. Earnings are expected to show a decline of 2.1 percent for the quarter, a modest improvement from the expected 3 percent fall on July 1. Seoul’s Kospi was off 0.2 percent at 2,071.87 and Bangkok, Taiwan and Manila also fell.

IBM (IBM.N) lost 3.6 percent to $167.01 in extended trade after its quarterly results on Monday. Halliburton added 73 cents, or 1.8 percent, to $40.72.

Among individual stocks, shares of Vivint Solar (VSLR) have moved sharply higher after the solar equipment maker agreed to be acquired by SunEdison (SUNE) and its unit TerraForm Power (TERP) for about USD2.2 billion. Investors and traders celebrated…unable to satisfy their hunger taking the stock higher and higher – causing it to break out to new highs…and because Nasdaq is a weighted index – it too rocketed to new highs…leaving the Dow, S&P 500 and Russell 2000 to ask – “What about us?” That is slightly better than the 4.5% decline forecast by analysts heading into the reporting season. Shares of gold mining companies including Barrick Gold and Newmont Mining plunged as a result, each down more than 10 percent.

It’s a slow week for major economic news, but investors have their hands full with about 129 companies expected to report earnings. Apple (AAPL.O), Yahoo (YHOO.O) and Microsoft (MSFT.O) are due later this week.

Hasbro surged 6.3 percent on a 25 percent rise in second-quarter earnings to $41.8 million. In this case, we may fix spelling and punctuation. Fears over a Greek exit from the euro have abated, helping lift European indexes.

In other futures trading on the NYMEX, wholesale gasoline rose 0.1 cent to close at $1.930 a gallon. Copper fell two cents to $2.48 a pound. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2 basis points at 2.369%.