By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rallied on Tuesday,
extending gains into a third session, as investors embraced upbeat
earnings while awaiting Apple Inc.'s results in the afternoon.
Of the more than 130 S&P's 500 companies that have reported
quarterly results so far, 70% beat earnings estimates but only 48%
exceeding sales expectations, according to Nick Raich, chief
executive at The Earnings Scout in Cleveland, Ohio.
"The good news is guidance is still being cut by a majority of
companies, but not all that much, or at a lesser rate. We're not
seeing major slashes to second-quarter expectations," Raich
said.
The benchmark stock indexes were at or near session highs.
The Dow Jones Industrial Average (DJI) rallied 147.91 points to
14,715.08, with 25 of its 30 components rising, led by Bank of
America Corp. (BAC), which rose 4.1% after Morgan Stanley upgraded
its shares to overweight from equal weight.
Travelers Companies Inc. (TRV) rose 2% after the Dow member and
insurer reported a jump in first-quarter profit.
The S&P 500 index (SPX) added 15.57 points to 1,578.07, with
finance and tech leading the gains that included all of its 10
major industry sectors.
The tech-heavy Nasdaq Composite (RIXF) climbed 38.22 points to
3,271.77.
For every stock on the decline five gained on the New York Stock
Exchange, where 238 million shares exchanged hands by 11:50 a.m.
Eastern. Composite volume surpassed 1.4 billion.
The price of oil fell, with crude futures (CLM3) down 8 cents at
$89.11 a barrel and gold (GCM3) off $7.30 to $1,413.9 an ounce.
Cautious cheering
Netflix Inc. (NFLX) surged 24% a day after the online-video
provider beat Wall Street forecasts.
Coach Inc. (COH) shares advanced after the maker of luxury
handbags reported fiscal-third-quarter results that topped
estimates and hiked its dividend by 15 cents to $1.35 a share.
DuPont Co. (DD) said first-quarter earnings more than doubled as
drought conditions prompted farmers to buy more drought-resistant
seeds and other products to protect crops from the chemicals
maker.
United Technologies Corp. (UTX) shares gained after the
diversified manufacturer on Tuesday reported a
better-than-estimated profit, with its chief executive in part
crediting the company's 2012 purchase of Goodrich, which makes
parts for airplanes.
Lockheed Martin Corp.'s (LMT) shares climbed after the weapons
supplier reported per-share earnings that beat Wall Street's
estimates, but also warned U.S. budget cuts could bring full-year
revenue down to the lower end of its prior guidance.
Listening to what corporate bosses have to say, "it's a cautious
tone, and usually these CEOs are cheerleaders. They're using excess
cash to buy back shares and increase dividends, as opposed to
reinvesting in their business and hiring people," Raich said.
Rebounding after their worst week in months, U.S. stocks climbed
Monday, as investors anticipated earnings from the technology
sector.
Apple (AAPL) reports after the market close, with shares of the
consumer-technology having dropped more than 30% over the past 12
months amid warnings over slower iPhone sales. (Read more on
lessons from Apple's time at the top of the market-cap ranking:
http://www.marketwatch.com/story/bigger-isnt-always-better-2013-04-23.)
Apple's shares gained 1.6% in Tuesday midday trading. Read
streaming coverage of Apple's earnings report.
The decline in sovereign-debt yields including in the distressed
Spanish and Italian markets also bolstered the case for
equities.
"Several countries are reporting record-low yields for their
sovereign debt across maturities ranging from two years to 10
years," noted Fred Dickson, chief investment strategist at Davidson
Cos.
Data showed that U.S. sales of new single-family homes rose 1.5%
in March to an annual rate of 417,000 from 411,000 in February.
Other data Tuesday had the Federal Housing Finance Agency's
home-price index rising 0.7% in February and Markit's "flash" U.S.
PMI for April sliding to a six-month low.
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