S&P Hits two-week high on Strong Earnings; M&A Supports
The S&P 500 hit a two-week high on Monday on the back of strong earnings, while a flurry of acquisitions indicated corporate America continues to see untapped value in the market. Annualised third-quarter earnings from S&P 500 components are expected to have risen 1.1 percent last quarter, following four quarters of contraction, according to Thomson Reuters I/B/E/S data.
Of the 120 companies that have reported so far, 78 percent have beaten analyst expectations, above the long-term average of 63.5 percent. Microsoft, which handily beat expectations last week, rose 2.2 percent and Apple, due to report on Tuesday, rose 0.9 percent.
"Consensus is earnings are going to continue to improve in part due to favourable energy prices and to strong consumption patterns here in the US," said Chad Morganlander, portfolio manager at Stifel Nicolaus in Florham Park, New Jersey.
Wall Street signalled scepticism that AT&T would be allowed by regulators to purchase Time Warner Inc for a planned USD85.4 billion.
The S&P 500 hit a two-week high on Monday on the back of strong earnings, while a flurry of acquisitions indicated corporate America continues to see untapped value in the market. Annualised third-quarter earnings from S&P 500 components are expected to have risen 1.1 percent last quarter, following four quarters of contraction, according to Thomson Reuters I/B/E/S data. 
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