Upbeat earnings news pushed stocks mostly higher over the course of the trading day on Tuesday, although the major averages ended the session mixed, as weakness in the tech sector contributed to a slim loss by the tech-heavy Nasdaq.
The Dow and the S&P 500 ended the day firmly in positive territory, reaching new five-year closing highs. The Dow rose 72.49 points or 0.5 percent to 13,954.42, while the S&P 500 climbed 7.66 points or 0.5 percent to 1,507.84.
Meanwhile, the Nasdaq briefly climbed above the unchanged line in the final hour of trading but ended the day down by 0.64 points or less than a tenth of a percent at 3,153.66.
The strength that emerged on Wall Street reflected a positive reaction to the some of the latest earnings news, although buying interest remained somewhat subdued.
Drug giant Pfizer (PFE) posted a notable gain after reporting better than expected fourth quarter earnings. Shares of Pfizer ended the day up by 3.2 percent.
Tupperware (TUP), Beazer Homes (BZH) and Eli Lilly (LLY) also showed strong moves to the upside after releasing their quarterly results.
At the same time, shares of Ford (F) came under pressure after the auto giant reported better than expected fourth quarter earnings but forecast a wider than previously estimated loss in Europe in 2013.
Yahoo (YHOO) also moved to the downside even though the online media giant reported fourth quarter results that exceeded analyst estimates.
Meanwhile, traders largely shrugged off a report from the Conference Board showing that U.S. consumer confidence fell to a fourteen-month low in January.
The Conference Board said its consumer confidence index tumbled to 58.6 in January from an upwardly revised 66.7 in December. With the decrease, the index fell to its lowest level since November of 2011.
While the report initially generated some negative sentiment, economists suggested that confidence would rebound as consumers become accustomed to the recent increase in payroll taxes.
Jennifer Lee, senior economist at BMO Capital, said, "Smaller paychecks are hurting consumer confidence but higher home and equity values, and eventually stronger job growth, should help buffer the pain."
Oil stocks moved sharply higher over the course of the trading day, benefiting from a notable increase by the price of crude oil. With crude for March delivery jumping $1.13 to $97.57 a barrel, the NYSE Arca Oil Index surged up by 2.7 percent to its best closing level in well over a year.
Valero Energy (VLO) turned in one of the oil sector's best performances, soaring by 12.8 percent after reporting much stronger than expected fourth quarter earnings growth.
Housing stocks also showed a strong move back to the upside after coming under pressure in the previous session, with the Philadelphia Housing Sector Index rising by 2.3 percent. D.R. Horton (DHI) helped lead the housing sector higher after reporting better than expected first quarter results.
Gold, brokerage, and pharmaceutical stocks also moved notably higher on the day, with gold stocks benefiting from an increase by the price of the precious metal.
On the other hand, substantial weakness was visible among computer hardware stocks, as reflected by the 3.7 percent loss posted by the NYSE Arca Computer Hardware Index. Lexmark (LXK) and Seagate Technology (STX) posted particularly steep losses on the day.
Networking, healthcare provider, and airline stocks also moved to the downside, helping to limit the upside for the broader markets.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.
Meanwhile, the major European markets all moved to the upside over the course of the session. While the U.K.'s FTSE 100 Index advanced by 0.7 percent, the German DAX Index and the French CAC 40 Index inched up by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries ended the day modestly lower after failing to sustain an early upward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed up by 1.4 basis points at 1.988 percent after hitting a low of 1.949 percent.
Trading on Wednesday could be impacted by reaction to the Federal Reserve's monetary policy announcement in the latter part of the trading day.
While the Fed is not expected to announce a chance in policy, reports have indicated that the central bank may start hinting at tightening monetary policy earlier than anticipated.
Ahead of the Fed announcement, traders are likely to keep a close eye on reports on private sector employment and fourth quarter GDP.
On the earnings front, Amazon (AMZN) and Broadcom (BRCM) are among the companies releasing their quarterly results after the close of today's trading.
Additionally, Boeing (BA), Northrop Grumman (NOC) and Southern Co (SO) are among the companies due to release their quarterly results before the start of trading on Wednesday.
by RTT Staff Writer
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