Stocks Holding On To Gains Amid Upbeat Earnings News - U.S. Commentary

(RTTNews) - After showing a lack of conviction in early trading, stocks have moved mostly higher over the course of the trading day on Tuesday. With the upward move on the day, the markets have further offset the sharp pullback that was seen last Friday.

The major averages have moved roughly sideways in recent trading, hovering in positive territory. The Dow is up 88.34 points or 0.5 percent at 16,537.08, the Nasdaq is up 23.57 points or 0.6 percent at 4,097.97 and the S&P 500 is up 8.39 points or 0.5 percent at 1,877.82.

The strength on Wall Street partly reflects a positive reaction to earnings news from big-name companies such as Sprint (S) and Merck (MRK).

Shares of Sprint have surged up by 9.3 percent after the wireless carrier reported a narrower than expected first quarter loss and provided upbeat guidance.

Drug giant Merck also remains firmly positive after reporting adjusted first quarter earnings that came in well above analyst estimates.

Not all of the earnings news was good, however, with shares of Goodyear (GT) under pressure after the tire maker reported weaker than expected first quarter results.

A report from the Conference Board showing a modest deterioration in U.S. consumer confidence in the month of April has also helped to limit the upside for the markets.

The Conference Board said its consumer confidence index dipped to 82.3 in April from an upwardly revised 83.9 in March. Economists had expected the index to climb to 83.0 from the 82.3 originally reported for the previous month.

While the consumer confidence index decreased compared to the previous month's upwardly revised reading, it is still at its second best level since January of 2008.

Traders also seem somewhat reluctant to make significant moves as the Federal Reserve's two-day monetary policy meeting gets underway.

With the Fed widely expected to announce another $10 billion reduction in the pace of its asset purchases on Wednesday, traders will be looking for signs regarding the outlook for interest rates.

Sector News

Biotechnology stocks are seeing considerable strength in mid-day trading, with the NYSE Arca Biotechnology Index up by 2.1 percent. Despite the gain, the index remains stuck in a recent trading range.

United Therapeutics (UTHR) is turning in one of the biotech sector's best performances after reporting better than expected first quarter results.

Significant strength is also visible among telecom stocks, as reflected by the 1.6 percent gain being posted by the NYSE Arca Telecom Index. While Sprint is leading the sector higher, Level 3 (LVLT) and Frontier (FTR) are also posting strong gains.

Tobacco, energy, and brokerage stocks are also seeing notable strength, while most of the other major sectors have shown more modest moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 1.5 percent.

Meanwhile, the major European markets all moved notably higher on the day. While the German DAX Index jumped by 1.5 percent, the U.K.'s FTSE 100 Index advanced by 1 percent and the French CAC 40 Index rose by 0.8 percent.

In the bond market, treasuries have moved to the downside as traders look ahead to the announcement from the Fed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 2.704 percent.