Dow closes over 15,000 for second straight day
Though earnings growth has slowed, profits are at record levels and are projected to keep rising.
NEW YORK - The Dow Jones industrial average rose, closing above 15,000 for a second day after passing the landmark level for the first time Tuesday.
On Wednesday, a day without any major economic releases, investors focused on company earnings as reporting for the first quarter draws to a close. Although earnings growth has slowed from last quarter, profits are at record levels and projected to rise throughout the year.
The Dow closed up 48.92 points, or 0.3 percent, at 15,105.12. The index is 15.3 percent higher for the year. The S&P 500 index was 6.73 points higher, or 0.4 percent, at 1,632.69, extending its advance for 2013 to 14.5 percent. The Nasdaq composite gained 16.64 points, or 0.5 percent, to 3,413.27. The Russell 2000, an index of smaller stocks, rose 2.59 points, or 0.3 percent, to 970.41.
Internet company AOL plunged as its subscription revenue fell, and hamburger chain Wendy's slumped after it reported revenue that fell short of Wall Street's expectations. On the positive side, high-end grocer Whole Foods and the video game publisher Electronic Arts rose sharply after predicting full-year profits that were higher than analysts were expecting.
Stocks have defied predictions that a sell-off would follow the spring surge as signs emerged that growth could be set for a slowdown. Both the Dow and the Standard & Poor's 500 index have gained every month of the year and are trading at record highs.
On Wednesday, AOL plunged $3.68, or 8.9 percent, to $37.74 after the company reported earnings that fell short of the forecasts of Wall Street analysts who follow the stock. Subscription revenue fell 9 percent.
Wendy's fell 34 cents, or 5.6 percent, to $5.78 after it reported a 2 percent rise in revenue to $603.7 million, short of the $615 million forecast of analysts.
Materials and information technology companies gained the most of the 10 industry groups in the S&P 500 index, rising 0.9 percent and 0.8 percent respectively. The two industry groups have surged in the last month and are finding favor with investors after lagging the index for the first three months of the year.
That suggests that investors are moving from the so-called defensive stocks - those which offer good dividends and can grow regardless of the state of the economy - into industries that will benefit more if the economy accelerates. Gains for the year so far have been led by health care stocks, which have advanced 19 percent, compared with 8 percent for technology companies.
Whole Foods climbed $9.39, or 10.1 percent, to $102.19 after the natural foods store chain said its fiscal second-quarter net income rose 20 percent. The company also raised its profit forecast for the full year.
Electronic Arts, which makes the Madden Football games and SimCity, jumped $3.15, or 17.1 percent, to $21.56 after it projected profits for the current fiscal year that were higher than analysts were expecting.
Freight transporter C.H. Robinson Worldwide was the biggest decliner in the S&P 500 index, falling $4.30, or 7 percent, to $57.26 after the company said that its profit margins were being squeezed.