Wall Street trudged through a mixed session Monday as investors, chewing over reports showing slim gains in personal spending and construction activity, refrained from any major moves. The Dow Jones industrials rose modestly to a new trading high.
The overall market initially slipped after the Commerce Department said personal income in March rose 0.7 percent, slightly more than anticipated, but personal spending increased 0.3 percent, less than the average forecast. Core personal consumption expenditures inflation _ a gauge of cost of living _ rose 0.4 percent, as expected. Year-over-year, core PCE inflation rose 2.1 percent.
The Commerce Department also said construction spending edged up 0.2 percent, dampened by housing activity, which decreased for the 11th month out of the past 12.
In addition to weak spending, which could eventually hurt corporate profits, investors question whether accelerating inflation could cause the Federal Reserve to raise interest rates. The central bank has said it remains concerned about rising prices even as the economy slows, and it has left open the possibility that interest rates, which have been stable since last summer, could move higher.
But, giving support to stocks, Verizon Communications, Kellogg Co. and RadioShack Corp. reported earnings Monday that were stronger than anticipated. Wall Street has soared over the last two weeks as first-quarter financial results beat analyst forecasts. With corporate growth slowing but outperforming expectations, price-to-earnings ratios have risen, suggesting that stocks have the potential to climb higher.
"Barring terrible data, I think we'll continue to drift to the upside," said Jeffrey Kleintop, chief market strategist at LPL Financial Services. He said mutual funds statistics show that just last week, individual investors began putting money into the market after several weeks of taking it out, but that surveys show only moderate levels of investor enthusiasm. "There's not a lot of overconfidence baked into the market yet."
In midday trading, the Dow Jones industrial average rose 8.86, or 0.07 percent, to 13,129.80. Earlier, it climbed as high as 13,156.21. The Dow, which has surged more than 760 points since April started, on Friday hit its 37th record close for the index since October.
Broader stock indicators were mixed. The Standard & Poor's 500 index fell 0.22, or 0.01 percent, to 1,493.85, and the Nasdaq composite index slipped 5.93, or 0.23 percent, to 2,551.28.
Bonds jumped, with the yield on the benchmark 10-year Treasury note falling to 4.64 percent from 4.70 percent late Friday.
Gold prices rose. The dollar extended its fall, which has brought it to all-time lows against the euro and 26-year lows versus the British pound.
Verizon, one of the 30 Dow stock, reported that its first-quarter profit fell 8.4 percent; however, its revenue rose 17 percent, and the results were better than analysts predicted. Verizon rose 7 cents to $37.96.
RadioShack Corp.'s first-quarter earnings jumped as costs fell, and the results topped analyst expectations. The electronics retailer rose $2.16, or 7.8 percent, to $29.88.
Humana Inc. posted a 15 percent decline in its first-quarter profit from a year earlier, which benefited from a gain. The health insurer's results beat Wall Street's expectations, but the stock fell $1.65, or 2.5 percent, to $63.29.
Cereal maker Kellogg Co. said Monday its first-quarter earnings rose 17 percent, helped by snack sales and a tax benefit. The company also raised its outlook for the full year. Kellogg rose 47 cents to $53.55.
Also keeping stocks buoyed Monday was fresh news of takeover activity: German stock exchange operator Deutsche Boerse AG confirmed it is in talks to buy the U.S. options exchange International Securities Exchange Holdings for $2.8 billion. ISE surged $19.44, or 42 percent, to $65.16.
In other economic data, the National Association of Purchasing Management-Chicago said its index of manufacturing activity was 52.9 in April, below the average estimate and down from a reading of 61.7 in March _ its highest level in two years. A reading above 50 in the index indicates growth in Midwest manufacturing, while a reading below 50 suggests contraction. The index is seen as a precursor of the national assessment by the Institute for Supply Management, which will be released Tuesday.