U.S. stocks advanced modestly Tuesday, with the S&P 500 edging toward record territory, as investors parsed a fresh batch of corporate earnings for clues on the broader economy.
What are major indexes doing?
The Dow Jones Industrial Average
DJIA, +0.10%
rose 41 points, or 0.2%, to 26,425, while the S&P 500 index
SPX, +0.11%
gained 4 points, or 0.1%, to 2,909, putting the large cap index within striking distance of its all-time closing high of 2,930.75 set on Sept. 20. The Nasdaq Composite Index
COMP, +0.41%
was up 33 points, or 0.4%, to 8,009. The tech-centric index is still more than 1% away from its record peak but is trading above the psychologically important 8,000-mark for the first time in six months.
Read: Stock market at ‘risk of a melt-up, not a meltdown,’ warns BlackRock’s Larry Fink
What’s driving the market?
Investors are poring over earnings reports released early Tuesday, with Bank of America Corp.
BAC, +0.07%
following on the lead of Goldman Sachs Group Inc.
GS, +1.07%
and Citigroup Inc.
C, +2.29%
issuing earnings that failed to surpass low expectations analysts had for the bank in the first quarter.
Dow component UnitedHealth Group Inc.
UNH, -5.62%
initially rose after it beat revenue and profit expectations for the first quarter while boosting its full year outlook. But the stock quickly surrendered those gains on concerns over threats that new health care reform measures, like Medicare-for-all, could significantly hurt health insurance industry profits. The stock fell 5%.
Read: Sanders’s ‘Medicare for All’ gets cheers at Fox News town hall
Last Friday, presidential hopeful and Vermont Senator Bernie Sanders called out United HealthCare CEO Steve Nelson by name in a tweet that linked to a Washington Post story on insurers working to pull Democrats away from Medicare-for-all.
Analysts have penciled in a year-over-year decline in S&P 500 corporate profit for the first quarter, which would mark the first fall in three years.
Industrial production fell 0.1% in March, the Federal Reserve said Tuesday, below the 0.1% rise expected by economists surveyed by MarketWatch. The same report showed capacity utilization falling to 78.8% in March, the lowest since last July, and below expectations of 79.1%
Home builder sentiment rose to a six month high in April, according to the National Association of Home Builders’ monthly confidence index, which rose to 63, up from 62 in March.
What are the analysts saying?
“The market is completely focused on earnings,” Eric Kuby, chief investment officer for North Star Investment Management. “Companies really lowered their guidance coming into earnings season, and we’re getting to the point where companies are doing a good job of stepping over that lowered bar,” he said.
“The tone of [UnitedHealth Group’s] outlook and particularly the political overhang is preventing them from rallying on good past performance,” he added.
“Of the 10 companies that have reported earnings this morning, nine have exceeded earnings-per -share forecasts and one reported results that were in line with expectations,” said Paul Hickey of Bespoke Investment Group, in a note to clients.
“While the revenue beat rate this morning hasn’t been nearly as strong (60%), it hasn’t been bad either,” he added. “Those positive results coupled with a big rally in Asia overnight has…the S&P 500 on pace for a new year-to-date high with all-time highs not too far away.”
What stocks are in focus?
Johnson & Johnson
JNJ, +2.21%
rose 2% after the consumer and health care product company beat Wall Street expectations for revenue and earnings in the first quarter.
Shares of AT&T Inc.
T, +0.33%
edged up 0.35 after the telecommunications giant said late Monday that it had sold its minority stake in Hulu back to the streaming-video joint venture. The deal valued Hulu at $15 billion, with AT&T’s 9.5% interest valued at $1.43 billion.
BlackRock Inc.
BLK, +2.78%
stock rose 2.9% after the money manager posted revenue and earnings for the first-quarter that fell less than analysts had anticipated.
Shares of Expedia Group Inc.
EXPE, +1.16%
gained 1.5% after the company said that it has entered into an agreement to acquire the Liberty Expedia Holdings Inc.
LEXEA, +0.60%
in an all stock deal.
Netflix Inc.
NFLX, +3.57%
will be in the spotlight when it reports after the closing bell. Apple Inc.
AAPL, +0.21%
and Walt Disney Co.
DIS, -1.33%
have unveiled their own visions for streaming television services that will compete with Netflix, which analysts say must now prove it can continue to grow its customer base. Netflix shares are up 3.4%.
How are other markets trading?
Stocks in Asia rallied, with China’s Shanghai Composite
SHCOMP, +2.39%
index closing 2.4% higher. Japan’s Nikkei 225
NIK, +0.24%
rose 0.2%, while Hong Kong’s Hang Seng Index
HSI, +1.07%
added 1.1%.
European stocks also rose, with the Stoxx Europe 600
SXXP, +0.29%
up 0.3%.
In commodities markets, the price of oil
CLK9, +0.49%
was higher, while gold
GCM9, -1.14%
dipped. The U.S. dollar
DXY, +0.11%
meanwhile, edged up.
—William Watts contributed to this report
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Source : MTV
