Shares on Wall Street inched higher in early trading on Tuesday, putting the Standard & Poor’s 500-stock index on track to extend its seven-week winning streak.
Shortly after the opening bell, the S.&P. 500 was up 0.3 percent, while the Dow Jones industrial average was up 0.1 percent. The Nasdaq composite rose 0.2 percent.
The strong start to the year has been helped by legislators in Washington, who temporarily averted a series of automatic spending cuts and tax increases, as well as by better-than-expected earnings and economic data. The Federal Reserve’s stimulus policy has also been a major factor.
But further gains for the benchmark S.&P. index have been a struggle as investors look for new catalysts to lift the index, which hovers near five-year highs.
The compromise by lawmakers on across-the-board spending cuts, known as sequestration, only postponed until March 1 a resolution to the Congressional budget fight.
The faster pace in merger-and-acquisition activity, a sign of optimism about the outlook on Wall Street, has resulted in more than $158 billion in deals announced so far in 2013.
“The firm market tone continues," said Andre Bakhos, director of market analytics at Lek Securities in New York, "fueled by a lack of negative surprises as well as an increase in M.&A. activity, adding confidence to market valuations.”
“The market has been able to shrug off minor negatives as it looks ahead to a potential bigger hurdle in the sequestration,” he said. “Until then, the situation looks stable.”
The No. 2 office supply retailer in the United States, Office Depot, surged 24 percent. The company is said to be in merger talks with a smaller rival, OfficeMax. OfficeMax shares jumped 30 percent.
The computer maker Dell reports fourth-quarter results on Tuesday, and it is expected to show earnings per share fall to 39 cents from 51 cents a year earlier. Analysts will have their first chance to question management on a buyout deal struck earlier this month by its chief executive, Michael Dell, private equity firm Silver Lake and Microsoft.
According to the Thomson Reuters data through Friday, of the 388 companies in the S.&P. 500 that have reported results, 69.8 percent have exceeded analysts’ expectations, compared with a 62 percent average since 1994 and 65 percent over the last four quarters.
Fourth-quarter earnings for S.&P. 500 companies are estimated to have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
European shares rose on Tuesday, lifted by gains at food group Danone and fresh signs of a German economic recovery, although broader market sentiment remained cautious ahead of Italian elections this weekend.
Wall St. Shares Inch Ahead
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Wall St. Shares Inch Ahead
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Wall St. Shares Inch Ahead
