Wall Street edges up as market takes it easy

Dow Jones:12,231.11 (+22.56) Nasdaq:2,737.15 (-1.48) S&P 500:1,285.08 (+0.49 )

US stocks closed out a fourth week of gains in quiet fashion yesterday, edging higher as the market took a breather after rallying 3 per cent on Europe’s deal to stem its debt crisis.

Though investors still have questions about implementing the deal, they appeared satisfied by Europe’s progress as stocks ended their longest weekly winning streak of the year.

The SP 500 rose 3.7 per cent for the week. The benchmark index had a seven-week rally that ended in January, but only two of the weeks were in 2011.

October also was on track to be the best month for stocks since 1974, supported by strong earnings.

Merck and Chevron both topped expectations with financial results yesterday.

“For it to not sell off is as much a positive sign as anything,” said Andrew Slimmon, managing director at Global Investment Solutions of Morgan Stanley Smith Barney in Chicago.

“We have had a very good earnings season and the benefit of what happened in Europe is that it allows investors to focus on the good earnings season and move the European problem from the primary worry to off the headlines.”

The Dow Jones industrial average gained 0.18 per cent, to 12,231.11. The Standard Poor’s 500 Index added 0.04 per cent, to 1,285.08. The Nasdaq Composite Index shed 0.05 per cent, to 2,737.15.

Concerns that the euro zone debt crisis would spread and stifle domestic bank profits had been a huge overhang for equities, with the S&P down almost 20 per cent – defined as a bear market – early this month.

As optimism grew about Europe’s debt plan, bulls began to gain momentum and the SP 500 is now up more than 13 per cent this month, on pace for its biggest monthly gain since October 1974.

Hewlett-Packard gained 3.5 per cent to $27.94 a day after it said it was ditching a plan to spin off its personal computers unit, a plan that was expected to have cost billions of dollars in expenses and lost business.

Merck rose 2.3 per cent to $35.11 after its profit and sales beat analyst estimates, and Chevron’s profit more than doubled. The stock advanced 0.6 per cent to $109.64. – (Reuters)