By Saumya Vaishampayan
The Dow Jones Industrial Average rose to its highest level in
nearly two weeks Wednesday, boosted by stronger-than-expected
results at Walt Disney Co.
The Dow gained 54 points, or 0.3%, to 17720, on track for its
highest close since Jan. 22. Walt Disney's shares rallied 7.7% and
contributed about 47 points to the Dow's overall gain. The Dow is a
price-weighted index which tends to be influenced by pricier
components such as Disney.
The S&P 500 fell three points, or 0.1%, to 2047, while the
Nasdaq Composite Index added five points, or 0.1%, to 4732.
Traders said stock moves in recent weeks have been driven by
bets on indexes rather than on individual stocks. That comes amid
an increased focus on moves in oil prices and currencies, as well
as political developments overseas, such as the new Greek
government's talks with its creditors, which are overshadowing
fourth-quarter earnings, they said.
"It seems like there's an inordinate amount of uncertainty in
the world, " said Michael Fredericks, portfolio manager of the
BlackRock Multi-Asset Income Fund, which has $10.2 billion under
management. "It's hard to have a lot of conviction."
Crude-oil futures tumbled 8.7% to $48.45 a barrel, snapping a
four-session streak of gains. Energy stocks fell 1.8%, down the
most on the S&P 500.
The euro fell slightly against the dollar, trading at $1.1418
versus $1.1480 on Tuesday. For the year, the euro has declined 5.6%
against the dollar.
Several companies have noted the broad strength in the U.S.
dollar as they report earnings. On Wednesday, Merck & Co. said
its sales fell in the fourth quarter, pressured by a stronger U.S.
dollar and patent expirations. Shares slipped 2.9%.
Justin Wiggs, a trader at Stifel Nicolaus, noted that companies
blamed the weather for weak earnings during 2013's fourth quarter.
After the early-year pullback in 2014, stocks continued to grind
higher. "This year, we're explaining them away with currency
moves," he said, referring to weak earnings. "The excuse is
different, but is it the same game?"
Investors continued to watch international developments,
especially in Greece. Greece's new leaders are trying to reach an
agreement about the country's hefty debt pile. European stocks
rose, with France's CAC 40 up 0.4% and Germany's DAX 30 gaining
0.2%.
"We're in a period where the market is really thrashing around,"
said Jeff Morris, head of U.S. equities at Standard Life
Investments. "It has to do a balancing act between those portions
of the U.S. economy showing genuine strength and recovery and
international influences," such as global growth concerns, he
added.
Back in the U.S., consumer discretionary stocks rose the most on
the S&P 500, up 0.9%.
Mr. Fredericks of BlackRock said he's attracted to sectors of
the stock market that could benefit from increased consumer
spending, such as some retailers and auto companies. But overall,
he said he has reduced stock exposure in his fund this year amid
increased international headwinds, high U.S. valuations and a
slowdown in earnings growth.
Among individual stocks, car maker General Motors Co. said
fourth-quarter profit surged 91%, beating analyst expectations. The
company said it plans to boost its dividend starting in the second
quarter. Shares rose 5.6%.
Staples Inc. agreed to buy Office Depot Inc. for $6.3 billion .
The two companies have roughly 4,000 stores and they projected
annual sales of more than $39 billion. Shares of Staples fell 12%,
while those of Office Depot added 0.5%.
In economic news, private payrolls increased by 213,000 in
January, according to a report compiled by payroll processor
Automatic Data Processing Inc. and forecasting firm Moody's
Analytics. Economists surveyed by The Wall Street Journal had
expected payrolls to increase by 240,000.
Still, the overall employment trend remains positive, investors
said.
"The economy is expanding, the private sector is adding jobs,
and that's good news" for stocks, said Matthew Kaufler, who
oversees about $2 billion as a portfolio manager at Federated
Investors. "With the economy on firmer footing, inflation
expectations subdued, corporations returning capital aggressively
to shareholders, those all point to an attractive environment for
equities," he added.
The ADP report is often viewed as an indicator for Friday's
closely watched jobs report, which is expected to show the economy
added 237,000 jobs in January, according to economists surveyed by
The Wall Street Journal.
In other markets, gold futures rose 0.3% to $1263.80 an
ounce.
The yield on the 10-year note was little changed at 1.788% from
1.781% on Tuesday. Yields rise as prices fall.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
Access Investor Kit for Fortum Oyj
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FI0009007132
Access Investor Kit for Automatic Data Processing, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0530151036
Access Investor Kit for The Walt Disney Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2546871060
Access Investor Kit for The Dow Chemical Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2605431038
Access Investor Kit for General Motors Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US37045V1008
Access Investor Kit for Office Depot, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6762201068
Access Investor Kit for Staples, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8550301027