* Germany's Merkel says leaders are on track
* Cisco shares jump on dividend hike
* Wal-Mart International growth slows, shares down
* Facebook falls as lockup of some insider shares ends
* Indexes up: Dow up 0.7 pct; S&P up 0.7 pct; Nasdaq up 1
By Angela Moon
NEW YORK, Aug 16 The S&P 500 closed at its
highest level since early April on Thursday after comments from
German Chancellor Angela Merkel that appeared to support the
European Central Bank's efforts to fight the region's debt
crisis, while Cisco Systems jumped after it raised its dividend.
The Nasdaq outperformed the market after Cisco shares jumped
nearly 10 percent and Apple Inc shares hit a new
closing high of $636.34, while broad gains across most S&P 500
sectors offset a gloom from Wal-Mart Stores Inc.
The day's gain was the first significant move since a 2
percent gain on Aug 3. Since then, the S&P 500 has been moving
mostly higher, but in a slow motion.
"I think the biggest plus today is the fact that people
realize that we are now really in an upward trend. We faced
resistance but for over a week, we moved higher slowly without a
significant pullback. That is what's pulling people in, although
volume remains low," said Frank Gretz, market analyst at
Wellington Shields & Co in New York.
"Some say we are climbing the 'wall of worry.' I think we
are climbing the wall of low expectations. Because nobody is
expecting anything good, it is easy to move up on any news."
Merkel said ECB chief Mario Draghi's vow to do all that is
necessary to defend the euro is in line with what European
leaders have been saying. Some traders took that as a sign
Germany may be drawing nearer to backing purchases of sovereign
bonds of troubled European nations such as Spain.
Facebook Inc fell to a new low of $19.69 as shares
hit the market after the expiration of a lockup period, which
had prevented sales by some insiders. The stock ended down 6.3
percent at $19.87.
Cisco Systems Inc rose 9.6 percent to $19.02 after
the company said it would hike its dividend 75 percent after
surprisingly strong results late Wednesday. The dividend
increase countered a gloomy outlook from Cicso on the debt
crisis and recession in Europe.
But gains were capped as Wal-Mart shed 3.1 percent to
$72.15. The world's largest retailer posted a
bigger-than-expected jump in quarterly profit but forecast
full-year earnings that could fall short of Wall Street
Thomson Reuters data shows that of the 468 companies in the
S&P 500 that have reported earnings through Thursday morning, 68
percent beat analysts' expectations, about the same rate as over
the past four quarters.
Earnings were the bigger driver given the economic data was
largely in line with forecasts. The number of Americans filing
new claims for jobless benefits edged higher last week although
the gauge of a longer trend fell close to a four-year low,
indicating a slowly healing jobs market.
But housing starts unexpectedly dropped 1.1 percent last
month as the industry continues to have trouble finding its
footing despite some recent signs of life in the sector.
The S&P capped its longest string of gains since December
2010 on Aug. 10, boosted by expectations of more stimulus from
central banks in the United States and euro zone in September to
stimulate their respective economies.
Retailer Sears Holdings Corp reported a quarterly
loss in line with Wall Street estimates as lower expenses offset
weak sales. Shares rose 6.5 percent to $60.29.
Dollar Tree fell 1.8 percent to $49.11 after the
discount retailer posted second-quarter earnings and forecast
quarterly earnings and sales below analysts' expectations.
About 5.82 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq on Thursday,
well below last year's daily average of 7.84 billion.