US stock indexes inch back from record highs

By Stan Choe, Associated Press

Published Monday, May 8, 2017 | 8:05 a.m.

Updated Monday, May 8, 2017 | 11:54 a.m.

NEW YORK —U.S. stock indexes inched back from their record highs Monday, while the dollar ticked higher against other currencies.

Trading was calm following the weekend's presidential election in France, which had the potential to upset global markets. The candidate who's in favor of keeping France in the European Union and in the euro currency won, to the relief of investors who feared the alternative would have hurt global trade. Markets had been rallying for weeks in anticipation of a victory by Emmanuel Macron, and analysts said that left little upside for when the result actually occurred.

KEEPING SCORE: The Standard & Poor's 500 index slipped a fraction to 2,398 as of 2:06 p.m. Eastern time. The Dow Jones industrial average fell 2 points 21,004. The Nasdaq composite was little changed at 6,101.

MARKETS ABROAD: The French CAC 40 fell 0.9 percent, but that follows a 7.4 percent surge in the preceding two weeks, when investors sent French stocks higher in anticipation of a Macron victory. In Germany, the DAX slipped 0.2 percent. The FTSE 100 index in London was virtually flat.

Asian markets fared better. Japan's Nikkei 225 index jumped 2.3 percent, as did South Korea's Kospi index. The Hang Seng in Hong Kong rose 0.4 percent.

TAKING STOCK: Markets around the world have been tearing higher in recent weeks, and the S&P 500 index closed at another all-time high Friday following excitement about the upcoming French election and strong earnings in the U.S.

"Corporate earnings have been phenomenal, the best quarter in five years," said Phil Orlando, chief equity strategist at Federated Investors. "The earnings recession that was about seven or eight quarter long is definitively behind us. It's over."

More than 80 percent of companies in the S&P 500 have reported their results for the first three months of the year, and most have topped analysts' expectations. With the U.S. job market continuing to improve, along with economies around the world, Orlando says he expects profits to keep rising through the year.

That has him, unlike market critics, not worried that stocks have grown too expensive relative to their profits, and he expects Monday's step back to be temporary.

"We've had a pretty strong bounce the last month or so," he said. "We ought to drift sideways and consolidate until we get another clue" on the market's next move.

BRANDED: Newell Brands had the largest gain in the S&P 500 after reporting stronger revenue and profit for its latest quarter than analysts expected. The company, whose brands include Paper Mate, Elmer's and Calphalon, also raised its earnings forecast for the year.

Shares jumped $5.37, or 11.6 percent, to $51.76.

SLUMPING: Tyson Foods dropped $3.84, or 6.1 percent, to $59.49 after reporting weaker revenue and earnings for its latest quarter than analysts expected. The company said fires at two of its chicken plants hurt results.

IN THE BAG: Kate Spade surged $1.38, or 8.1 percent, to $18.35 after agreeing to a $2.4 billion buyout by Coach, its rival in the luxury goods market. Coach will pay $18.50 per share for Kate Spade.

Often when companies announce takeovers, the purchaser will see its share price drop on worries that it paid too much or pursued an ill-fitting deal. But Coach rose $2.07, or 4.9 percent, to $44.73.

NEWS FLASH: Tribune Media jumped $2.14, or 5.3 percent, to $42.43 after Sinclair Broadcast Group said it would buy its rival in a cash-and-stock deal valued at $43.50 per share, or a total of $3.9 billion. Sinclair fell 95 cents, or 2.6 percent, to $36.00

DOLLAR GAIN: The euro had been climbing against the dollar in recent weeks as expectations built for a Macron victory. Following the actual result, it fell like the French stock index. The euro slipped to $1.0928 from $1.0990 late Friday. The dollar edged up to 112.84 Japanese yen from 112.61 yen. The British pound slipped to $1.2941 from $1.2969.

COMMODITIES: Benchmark U.S. crude fell 26 cents to $45.96 per barrel. Brent crude, the international standard, fell 43 cents to $48.67 per barrel.

Natural gas fell 12 cents, or 3.6 percent, to $3.15 per 1,000 cubic feet, heating oil was close to flat at $1.44 per gallon, and wholesale gasoline held steady at $1.51 per gallon.

Gold rose 20 cents to settle at $1,227.10 per ounce, silver fell 2 cents to $16.26 per ounce and copper fell 4 cents to $2.49 per pound.

YIELDS: Bond yields edged higher. The yield on the 10-year Treasury rose to 2.38 percent from 2.35 percent late Friday. The two-year yield rose to 1.33 percent from 1.31 percent, and the 30-year Treasury yield ticked up to 3.02 percent from 2.99 percent.