Stocks Rebound After Hardest Hit Of 2013
U.S. stocks closed with substantial gains Tuesday, rebounding from their hardest knock this year as first-quarter reports from companies including Coca-Cola Co. beat expectations and data had housing starts up 7% in March.
“Earnings and the housing report were the key drivers to turn things around today,” said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc. in Hinsdale, Ill.
On Tuesday, the Dow Jones Industrial Average recouped a large chunk of its 265-point loss the prior day, rising 157.58 points to 14,756.78 for its best session in nearly seven weeks.
The S&P 500 index added 22.21 points to 1,574.57, with materials leading the gains across all 10 of its major sectors.
The Nasdaq Composite rose 48.14 points to 3,264.63.
For every stock falling nearly five gained on the New York Stock Exchange, where 743 million shares traded. Composite volume topped 3.6 billion.
Treasury prices slid, with the yield on the benchmark 10-year note used in determining mortgages and other consumer loans rising to 1.72%.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery climbed $26.30 to finish at $1,387.40 an ounce, recovering a slight piece of what was lost after their steepest decline since 1983. The price of oil gained marginally after a three-session drop, edging up 1 cent to $88.72 a barrel.
Tuesday’s economic reports had U.S. housing starts rising 7% in March, paced by apartment-building construction, while consumer inflation fell 0.2% last month and industrial production increased 0.4%.
The upbeat housing report boosted building-related companies, with W.W. Grainger Inc. up 7.2% and PulteGroup Inc. up 4.2%.
Share of Dell Inc. were flat after the personal-computer maker said a special committee of its board had reached an agreement with billionaire investor Carl Icahn to cap his share ownership as Dell mulls takeover offers from Icahn’s firm as well as from a group led by CEO Michael Dell and from buyout specialist Blackstone Group.
Goldman Sachs shares erased initial gains to end down 1.6% after the investment bank reported first-quarter results that beat Wall Street expectations, but trading revenue disappointed and Chairman and CEO Lloyd Blankfein took a cautious tone.
Shares of Coca-Cola Co. rose 5.7% after the beverage maker reported first-quarter results that beat expectations, while retailer Target Corp. warned first-quarter earnings would come in below expectations, taking a toll on Target shares.
The fact that Coca-Cola topped estimates a day after similar results from Citigroup Inc. “conveys the global picture is not as bad as we may be thinking,” said Hinsdale Associates’ Fitzpatrick.
BlackRock Inc. , the biggest U.S. provider of exchange-traded funds, topped Wall Street forecasts with a 10% rise in first-quarter profit. U.S. Bancorp matched earnings forecasts, while revenue saw an unexpected drop.
Johnson & Johnson
gained 2.1% after the maker of drugs and medical devices reported first-quarter revenue that beat expectations.
“Fundamentally we feel good about the earnings that are coming through, [and] it looks like it’s going to be the same as the last few quarters,” with roughly 60% beating expectations, 20% matching and 20% falling short, said Chip Cobb, portfolio manager at BMT Asset Management at the Bryn Mawr Trust Co. in Bryn Mawr, Pa.
“We hope and pray that Boston is a singular event, and that’s all there is going to be,” Cobb said of Monday’s bombings at the Boston Marathon that killed three people and injured 176 others, with 17 still in critical condition.
Marketwatch
