Wall Street edges up in choppy trade; BlackBerry slumps

NDTV Profit Desk

05 Nov 2013, 07:35 AM IST

U.S. stocks ended higher on Monday in light trading volume as investors were reluctant to make big bets with S&P 500 index just below the all-time closing high.

The day's lackluster activity was partly due to the Dow and S&P 500 indexes' four consecutive week of gains. Investors were also awaiting the all-important non-farm payrolls report due Friday for further clues on when the Federal Reserve may begin to start tapering its stimulus.

Among individual stocks, U.S.-listed shares of BlackBerry ended down 16.4 per cent to $6.50 after hitting a 52-week low of $6.40. The smartphone maker said it was abandoning a plan to sell itself. With Monday's drop, the stock is at levels unseen since October 2003.

Twitter, meanwhile, raised the upper end of the projected price range for its initial public offering later in the week, an encouraging sign for the social media company.

The otherwise quiet start to the week follows a week of record highs for U.S. stocks. It remains to be seen whether the market can push higher, with much dependent on the steps the Federal Reserve will take in the months ahead in response to economic data. The Fed's massive bond purchases have helped prop up the economy and the equity market for much of the year.

"The rebound in the U.S. stock market in late October pushed the S&P 500 index up to a 24 per cent gain since the start of the year. As a result, we believe this is probably a good time for investors to rebalance their portfolios which may now have equity holdings exceeding their recommended allocations," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in New York.

"We remain longer-term positive on U.S equities but would recommend taking some profits in stocks at this time."

The benchmark S&P index has risen 4.3 per cent over the past four weeks as the partial U.S. government shutdown in October pushed back expectations for the Fed to begin curtailing its stimulus into the first quarter of next year.

The Dow Jones industrial average was up 23.57 points, or 0.15 per cent, at 15,639.12. The Standard & Poor's 500 Index was up 6.29 points, or 0.36 per cent, at 1,767.93. The Nasdaq Composite Index was up 14.55 points, or 0.37 per cent, at 3,936.59.

St. Louis Federal Reserve President James Bullard told a television news channel the Fed should not rush a decision to scale back its asset purchases because of low inflation.

Recent manufacturing data have been stronger than expected, lending weight to the argument that the economy may be sturdy enough to handle an earlier-than-expected reduction in the central bank's bond-buying program.

All key S&P sectors were higher, led by telecoms and energy stocks. The S&P energy index rose 1.3 percent and the telecoms sector index gained 0.8 percent.

In earnings, Kellogg Co advanced 0.7 per cent to $62.72 after the cereal maker reported a 3 per cent rise in quarterly profit, and said it would slash 7 per cent of its workforce by 2017.

With about 75 per cent of S&P 500 companies having reported results so far, 69 per cent have topped Wall Street's expectations, above the long-term average of 63 per cent. Just 53 per cent have topped revenue forecasts, below the 61 per cent average since 2002, Thomson Reuters data showed.

Volume totaled about 5.1 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.2 billion this year.

On the New York Stock Exchange, around two stocks fell for every five that rose, while on the Nasdaq, advancing stocks beat declining ones by a ratio of 3 to 2.