By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rose on Tuesday, recouping
after an erroneous tweet pushed equities down 1% in seconds, as
investors embraced upbeat earnings ahead of Apple Inc.'s
results.
"The mini crash and recovery does say something about the impact
Twitter feeds can have," Bruce McCain, chief investment strategist
at Key Private Bank, said of a hacking attack on the Associated
Press Twitter account.
In a matter of seconds, the Dow Jones Industrial Average (DJI)
lost more than 150 points, to trade briefly down nearly 13 points
on the day, before springing back. The Associated Press said its
Twitter account was hacked after its Twitter feed erroneously said
that there had been two explosions at the White House.
"It probably does reveal a little bit about the skittishness of
this market, not that it wouldn't have had an impact in any case,
but the market has struggled with confidence," said McCain, who
cited the defensive tilt of the market in the last month or so,
with health care, consumer staples and utilities outperforming more
economically sensitive sectors.
At last check, the Dow industrials were up 147.95 points at
14,715.12, with 22 of its 30 components rising, led by DuPont Co.
(DD) , up 3.9%, after its first-quarter earnings more than doubled
as drought conditions prompted farmers to buy more of its
drought-resistant seeds and other products to protect crops.
Bank of America Corp. (BAC) added 3.3% after Morgan Stanley
upgraded its shares to overweight from equal weight.
Of the more than 130 S&P's 500 companies that have reported
quarterly results so far, 70% beat earnings estimates but only 48%
exceeded 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.
Travelers Companies Inc. (TRV) rose 2.1% after the Dow member
and insurer reported a jump in first-quarter profit.
The S&P 500 index (SPX) added 14.01 points to 1,576.51, with
finance and tech leading the gains that included all of its 10
major industry sectors.
The tech-heavy Nasdaq Composite (RIXF) climbed 30.73 points to
3,264.27.
For every stock on the decline, more than three gained on the
New York Stock Exchange, where 495 million shares exchanged hands
by 3:30 p.m. Eastern. Composite volume neared 3 billion.
The price of oil slipped, with crude (CLM3) down 1 cent at
$89.18 a barrel and gold (GCM3) off $12.40 to end at $1,408.80 an
ounce.
Cautious cheering
Netflix Inc. (NFLX) surged 25% a day after the online-video
provider's earnings 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.
United Technologies Corp. (UTX) shares slid after the
diversified manufacturer on Tuesday reported a
better-than-estimated profit but its chief financial officer said
the government's scheduled budget cuts have begun to dent
orders.
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.
U.S. stocks climbed Monday, rebounding after their worst week in
months, as investors anticipated earnings from the technology
sector.
Apple (AAPL) reports after the market closes on Tuesday. Shares
of the consumer-technology have 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 were up 2.2% in Tuesday trading. Read streaming
coverage of Apple's earnings report.
The decline in sovereign-debt yields, including in Spain and
Italy, 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.
In China, HSBC Holdings and Markit Economics released its
initial purchasing managers' index reading of 50.5 for April.
"We're getting a flow of increasingly disappointing news from
China and some of the overseas markets. And our economy is not
strong enough to simply go it alone," said Key Private Bank's
McCain.
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