2Q gains offer good news for U.S. stocks

NEW YORK - The stock market got back on track in the second quarter. After a bumpy start to the year, the Standard & Poor's 500 index resumed its upward climb in the March-June period.

The index rose 4.7 percent, compared with a 1.3 percent gain in the first three months of the year.

As the weather improved in the spring, investors received more encouraging news about hiring and manufacturing. Investors sold stocks in January as they worried about the economic impact of an unusually harsh winter.

Stocks also were propelled higher by a turnaround in some of the riskier parts of the market. Internet, biotechnology, and small-company stocks all rebounded after dragging the market lower in March.

Corporate earnings, already at record levels, continued to climb higher. Even an escalating conflict in Iraq that pushed up oil prices in June wasn't enough to stop stocks from rising.

"I'm not seeing anything that's going to derail the overall upward climb of the market," said Karyn Cavanaugh, senior market strategist with Voya Investment Management. "The economic backdrop is getting better, so companies will make even more money."

On Monday, the Standard & Poor's 500 index fell 0.73 points, less than 0.1 percent, to 1,960.23, just two points from its June 20 record close of 1,962.87.

The Dow Jones industrial average fell 25.24 points, or 0.2 percent, to 16,826.60, and posted a gain of 2.4 percent in the quarter.

The Nasdaq composite rose 10.25 points, or 0.2 percent, to 4,408.18, rising 5 percent in the quarter.

Stocks flickered between small gains and losses Monday, keeping major indexes close to record levels as investors assessed the latest data on housing.

Home builders rose on news that the number of Americans who signed contracts to buy houses shot up in May. The National Association of Realtors said its seasonally adjusted pending-home-sales index rose 6.1 percent, to 103.9 - the sharpest month-over-month gain since April 2010.

Gains for home builders were led by D.R. Horton, which rose 75 cents, or 3.1 percent, to $24.58.

Utility stocks also did well Monday. The sector rose 0.8 percent, making it the biggest gainer of the 10 industry sectors in the S&P 500.

The group has climbed 16.4 percent this year as bond yields have fallen, forcing investors to look elsewhere for income.

On Monday, the yield on the 10-year Treasury note, which falls as bond prices rise, dropped to 2.52 percent, from 2.54 percent on Friday. It had started the year at 3 percent.