* McDonald's says 2013 results to be 'challenged' by Europe
* Shares of financials lead market, up for 10th day in 12
* Netflix shares fall after results
* Dow flat; S&P up 0.2 pct, Nasdaq up 0.4 pct
By Alison Griswold
NEW YORK, July 22 The S&P 500 notched a third
consecutive record closing high on Monday and major indexes
rose, though disappointing McDonald's earnings kept the Dow from
making significant gains.
Banks and health shares were the day's best performers, with
financials advancing for the 10th time in the past 12 sessions.
Bank of America led the group, while U.S.-listed shares
of UBS rose 3.2 percent to $19.23 after the Swiss bank's
second-quarter profit beat forecasts despite a charge to settle
a U.S. lawsuit.
Analysts said the market is likely to trend higher in the
absence of any weak economic news but would need strong earnings
and positive forecasts from companies to post large gains.
"Most earnings have been good, maybe not great but good, and
as a consequence I think investors continue to show that
equities is the asset class of choice for them right now," said
Rick Meckler, president of LibertyView Capital Management in
Jersey City, New Jersey.
"It's difficult to see, short of some really strong economic
numbers, what could push the market significantly ahead."
Weaker-than-expected results from McDonald's Corp,
the world's largest restaurant chain, weighed on the Dow after
the company said full-year results would be "challenged" by
falling sales in Europe, its biggest market. Its shares lost 2.7
percent to $97.58.
Shares of Netflix Inc fell 6.1 percent in
after-hours trading after the company reported a higher profit
for the second quarter but added fewer subscribers to its video
streaming service than analysts expected.
Five of the S&P 500 industry sectors advanced in Monday's
session. Trading volume was below average, with 5.2 billion
shares changing hands on U.S. exchanges.
The Dow Jones Industrial Average was up 1.81 points,
or 0.01 percent, at 15,545.55. The Standard & Poor's 500 Index
rose 3.44 points, or 0.20 percent, at 1,695.53, and the
Nasdaq Composite Index added 12.77 points, or 0.36
percent, at 3,600.39.
The S&P 500 has added nearly 19 percent so far this year.
Recent data showed funds that hold U.S. stocks gained $16.96
billion in the week ended Wednesday, the most since June 2008.
A rise in metal prices boosted materials shares, with
Newmont Mining Corp up 5.8 percent to $30.35, enough to
lead gains in the S&P materials sector.
Tech shares also moved higher, with Microsoft
adding 1.9 percent to $32.01 after the software maker tumbled
11.4 percent on Friday following dismal results.
The PHLX housing sector index fell 0.8 percent after
an unexpected drop in U.S. home resales in June. The data also
gave support to bets the Federal Reserve will extend its rate of
bond purchases to support the economy.
September, however, remains the most likely time for the Fed
to announce that it will begin scaling back its $85 billion a
month in bond purchases, according to a Reuters poll.
Nearly one-third of S&P 500 companies are expected to report
earnings this week, including Apple on Tuesday.
Of the 109 companies in the S&P 500 that have reported
earnings for the quarter, 64.2 percent have beaten analyst
expectations, while fewer than half have topped revenue
estimates, Thomson Reuters data showed.