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Stocks edge higher; US service sector improves

Published on NewsOK Modified: May 5, 2014 at 3:50 pm •  Published: May 5, 2014
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NEW YORK (AP) — Worries from overseas held back the stock market on Monday.

Stocks started the day lower after a report showed that manufacturing in China, the world's second biggest economy, had contracted for the fourth straight month. News of more fighting between pro-Russian activists and soldiers in Ukraine also made investors cautious.

The negative news was offset by a report that showed U.S. service firms grew more quickly last month as sales and new orders rose. Stocks climbed after the report was released mid-morning and ended the day higher, but the gains were slight. Stocks remain close to all-times highs, and investors still appear unwilling to push the market higher even amid signs that the U.S. economy is strengthening.

"The foreign concerns are dampening what might otherwise have been a better day in the market," said Kate Warne, an investment strategist at Edward Jones, a financial adviser. "It really is quite a mixed picture."

The Standard & Poor's 500 index rose 3.52 points, or 0.2 percent, to 1,884.66. The index is six points below its record close of 1,890 set on April 2. The Dow Jones industrial average rose 17.66 points, or 0.1 percent, to 16,530.55. The Nasdaq composite rose 14.16 points, or 0.3 percent, to 4,138.06.

Utilities stocks rose the most in the S&P 500 index. The utility sector has risen 12.5 percent this year, making it the best performing industry group in the S&P 500. Utilities stocks typically pay big dividends and have been popular with investors as bond yields have fallen this year, said Kristina Hooper, U.S. investment strategist at Allianz Global Investors.

"Investors have been starved, when it comes to traditional sources of income," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors.

Financial stocks were the day's biggest losers. The declines were led by JPMorgan Chase, after the bank said late Friday in a quarterly filing that it expects revenue from its bond and stock market unit to be down about 20 percent in the second quarter in a "continued challenging environment." The bank's first-quarter earnings were crimped by lower revenue at its bond trading business.

JPMorgan slumped $1.36, or 2.4 percent, to $54.22. Other banks with big bond-trading businesses, such as Morgan Stanley, Goldman Sachs and Citigroup also fell.

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