The Dow Jones Industrial Average gained 14 points, or 0.1%, to 10157. The Nasdaq Composite rose 0.3% to 2229.
The Standard & Poor’s 500-stock index rose 0.3% to 1080, with tobacco companies leading the consumer staples sector higher. Reynolds American gained 4.2%, Altria Group rose 3.2% and Lorillard gained 2.7% after the high court refused to revisit a case that found the tobacco industry violated federal racketeering laws by engaging in a decades-long scheme to deceive the public about the dangers of smoking.
The court rejected an appeal by the government, which sought to revive a rejected attempt to get tobacco companies to forfeit up to $280 billion in profits and pay $10 billion for smoking-cessation programs. The tobacco companies had also filed an appeal.
Telecommunications stocks also gained. In a boost for smartphone providers, President Barack Obama on Monday signed a memorandum to nearly double the amount of federal and commercial spectrum available for smartphones and wireless Internet devices.
In Europe, most equity markets posted slight gains after the Group of 20 world leaders pledged over the weekend to halve their budget deficits by 2013. The Stoxx Europe 600 index up 1.2% recently. Boosting sentiment, Germany’s parliamentary finance committee on Monday watered down the bill banning “naked” short-selling of all stocks and euro currency derivatives not intended for hedging against currency risks.
The dollar strengthened against both the yen and the euro, which was recently trading around $1.2289. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, rose 0.4%. Demand for Treasurys climbed, with the 10-year note up to push yield down to 3.04%. Crude-oil prices declined, slipping below $78 a barrel, while gold futures edged down.
In other economic data, the Commerce Department said consumer spending, a key growth engine for the U.S. economy, was up 0.2% last month after a flat reading in April, in line with the expectations of economists surveyed by Dow Jones Newswires. Also matching expectations, incomes rose 0.4% in May, helped by slow improvements in the jobs market, following a 0.5% increase in April.
But investors worried that the private sector was not boosting income as much as the government.
“Income is rising, but where is it rising? It’s primarily in the public and not the private sector,” said Barry James, president and chief executive of James Investment Research. “Inside the numbers is not particularly encouraging to me,” though he did note the national savings rate’s rise from to 4% last month from 3.8% in April was a positive sign.
American depositary shares of oil giant BP PLC rose 2.6% as fears subsided that a tropical storm would disrupt the cleanup operation. However, BP said the costs of cleaning up the oil spill in the Gulf of Mexico have soared to $2.65 billion, an increase of $300 million from its estimate last Friday.
Noble Corp. jumped 4.4% after agreeing to acquire privately held drilling company FDR Holdings for $2.16 billion as the energy company also announced the signing of new contracts with Royal Dutch Shell PLC.
By Kristina Peterson, Dow Jones Newswires
JUNE 28, 2010