By Kristina Peterson
NEW YORK (MarketWatch) -- The U.S. market kicked off November
trading with modest gains, boosted by encouraging earnings reports
and Chinese data, but investors tread lightly ahead of major market
events later in the week.
The Dow Jones Industrial Average (DJI) rose 52 points, or 0.5%,
to 11171. Technology components gained after the Semiconductor
Industry Association said global chip sales rose 2.9% in September
from a month earlier. Intel (INTC) climbed 2.5%, while Cisco (CSCO)
rose 1.1% and Microsoft (MSFT) added 0.9%.
Market moves are likely to be muted as traders brace for the
results of Tuesday's midterm elections and Wednesday's conclusion
of a meeting of the U.S. Federal Reserve's policy-making committee.
The stock market has rallied since early September and on Friday
wrapped up its best October performance since 2003, largely on
expectations that the Fed will resume purchasing bonds in order to
stimulate the economy. Now some are worrying that the high level of
anticipation going into the week's events could lead to
disappointment if the size or scope of the Fed's expected
announcement fails to match the market's expectations.
The Nasdaq Composite (RIXF) gained 0.5% to 2521. The Standard
& Poor's 500-share index (SPX) rose 0.6% to 1190, led by its
energy and technology stocks.
Boosting energy stocks, Baker Hughes (BHI) surged 5.4% after its
third-quarter earnings soared as the oilfield-services company
benefited from a rebound in North America, a seasonal recovery in
Canada and the April acquisition of BJ Services.
Adding to hopes for global economic growth, two measures of
Chinese manufacturing data unexpectedly increased. A set of data
from HSBC showed one of the biggest month-on-month increases since
the index was launched in 2004. The Shanghai Composite rose
2.5%.
The strong Chinese data put pressure on the dollar. The U.S.
Dollar Index (DXY) which tracks the currency against a basket of
six others, slipped 0.3%.
In corporate news, Ambac Financial Group (ABK) tumbled 56% after
the bond insurer warned that its board declined to make an interest
payment and said it is negotiating plans for a prepackaged
bankruptcy proceeding with senior debt holders. If it can't reach
an agreement for such a plan, it plans to file for Chapter 11
bankruptcy protection by the end of the year.
U.S. shares of BHP Billiton (BHP) rose 1.4% as its $39 billion
hostile bid for Potash Corp. of Saskatchewan (POT) is back in the
spotlight after the Sunday Times (of London) newspaper reported
that the mining giant is considering lifting its bid by 10%. Shares
of Potash edged down 0.2%.
Among stocks reporting earnings, IntercontinentalExchange
slipped 0.7% even as its third-quarter earnings rose 10% on record
trade on its U.S. futures markets and a rebound in energy trading,
but the exchange had acquisition-related costs and slower activity
in its credit division.
Corning (GLW) rose 0.7% after its third-quarter profit jumped
22%, boosted by higher sales and margins, though its results just
missed analysts' expectations. Corning, one of the leading
providers of glass used in LCD screens for electronics, said it
expects glass prices to fall slightly in the fourth quarter due to
ample supply.
Humana (HUM) rose 0.4% after its third-quarter profit rose 30%
as revenue rose on increases in enrollment. Humana, one of the
nation's biggest providers of privately-run Medicare Advantage
health plans for seniors, also lifted its outlook for the year.
In U.S. economic data, consumer spending rose 0.2% in September
after increasing by 0.5% in the previous two months, the Commerce
Department said. Americans' incomes fell 0.1% in September after a
0.4% rise in August. It was the first decline in incomes since July
2009. Economists surveyed by Dow Jones Newswires had forecast
spending would climb 0.4% in September. Incomes were expected to
increase 0.2%.
The core price index for personal consumption expenditures,
which excludes food and energy prices because of their volatility,
was flat in September compared to August.
Demand for Treasurys was mixed, with the two-year note flat and
the 10-year note (UST10Y) up, pushing its yield down to 2.57%.
Crude-oil prices rose above $83 a barrel, while gold futures also
climbed.