U.S. stocks managed to close higher Monday, after investors took news of another overnight stumble in the Shanghai stock market in stride, and a sustained stream of deal news offset rising bond yields and crude prices.
Buyers returned in the final hour of trading, after the close of trading in crude oil and government bonds, and pushed the overall market higher. The modest gains allowed the S&P 500 to set its fourth record high close in a row and pushed the Dow Jones industrials to another high.
After trading in negative territory for most of the session, the Dow Jones Industrial Average (DJI) rose 8.2 points to 13,676.3, with 14 of its 30 components rising, led by the likes of Disney (DIS) , AT&T Inc. (NYSE:T) (T) and Home Depot Inc. (NYSE:HD) (HD) .
Leading the gains among blue chips, Wal-Mart Stores Inc. (NYSE:WMT) (WMT) rose 3.5%.
The stock was upgraded by JP Morgan, HSBC, Wachovia and Morgan Stanley following the retail giant's shareholder meeting, where it revealed plans to cut capital spending and return more cash to shareholders.
General Electric Co. (NYSE:GE) (GE) rose almost 1% after a Barron's (NYSE:DJ) article outlined the case for breaking up the juggernaut multinational.
The S&P 500 index (SPX) also reversed early weakness to gain 2.84 points to 1, 539.18, along with the Nasdaq Composite (RIXF) , which rose 4.37 points to 2, 618.29.
Deal-making news, including Flextronics International Ltd.'s (NASDAQ-NMS:FLEX) (FLEX) agreement to buy Solectron Corp. (NYSE:SLR) (SLR) for $3.6 billion, provided some support for tech shares and the broad market.
Palm (PALM) jumped 8.8% after agreeing to sell 25% of the firm to a private- equity firm for $325 million.
Trading volumes showed 1.347 billion shares exchanging hands on the New York Stock Exchange and 1.898 billion trading on the Nasdaq stock market. Advancing issues topped decliners by 19 to 13 on the NYSE, and by 15 to 14 on Nasdaq.
Blasé about Shanghai?
The mild dip in U.S. trading signaled that investors aren't overly worried about yet another stumble in the Shanghai stock market. In spite of an 8% battering in Shanghai, other Asian markets recovered, including the Hang Seng in Hong Kong and the Nikkei in Tokyo.
A tumble in the Chinese stock market last week was followed by rally on Wall Street the next day. When Shanghai fell sharply in late February, the Dow industrials had plunged 416 points.
But since then, U.S. stocks have staged an impressive rally. Through May alone, the Dow gained 4.3%, the S&P advanced 3.2% and the Nasdaq gained 3.1%.
Bond yields rising
Last week, a slew of better-than-expected data, including the May employment report, boosted confidence in the economy and helped the Dow gain 1.2%, the S&P 1.4% and the Nasdaq 2.2%.
