Stocks Regain Ground In Reaction To Earnings, Economic Data - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Tuesday after falling sharply over the past few sessions. A positive reaction to the latest earnings news and economic data contributed to the rebound by the markets.

The major averages all closed in positive territory, bouncing off their lowest closing levels in over a month. The Dow advanced 90.68 points or 0.6 percent to 15,928.56, the Nasdaq rose 14.35 points or 0.4 percent to 4,097.96 and the S&P 500 climbed 10.94 points or 0.6 percent to 1,792.50.

The strength on Wall Street was partly due to better than expected earnings from big-name companies such as Ford (F) and Pfizer (PFE).

The upbeat results helped to overshadow a sharp drop by shares of Apple (AAPL), which tumbled by 8 percent to their worst closing level in over three months.

While Apple reported better than expected first quarter earnings after the close of trading on Monday, the tech giant also reported weaker than expected iPhone sales and provided disappointing revenue guidance for the current quarter.

Buying interest was also generated by the release of a report from the Conference Board showing a continued improvement in consumer confidence in the month of January.

The Conference Board said its consumer confidence index climbed to 80.7 in January from a downwardly revised 77.5 in December. Economists had expected the index to edge up to 79.0 from the 78.1 originally reported for the previous month.

Lynn Franco, Director of Economic Indicators at the Conference Board, said, "All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead."

A separate report from Standard & Poor's showing continued home price growth in November also helped to offset any negative sentiment generated by a Commerce Department report showing an unexpected drop in durable goods orders in December.

Sector News

Housing stocks turned in some of the market's best performances on the heels of the home price data, driving the Philadelphia Housing Sector Index up by 3.2 percent. The gain by the index came after it ended the previous session at its lowest closing level in over a month.

D.R. Horton (DHI) helped to lead the housing sector higher, with the homebuilder surging up by 9.8 after reporting better than expected first quarter results.

Considerable strength was also visible among steel stocks, which regained some ground after falling sharply in recent sessions. The NYSE Arca Steel Index jumped 2 percent, bouncing off Monday's three-month closing low.

Biotechnology stocks also turned in a strong performance, resulting in a 1.9 percent gain by the NYSE Arca Biotechnology Index. Nektar Therapeutics (NKTR) and Incyte (INCY) posted standout gains.

Gold, airline, brokerage, and natural gas stocks also saw significant strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. While Japan's Nikkei 225 Index edged down by 0.2 percent, China's Shanghai Composite Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. The French CAC 40 Index jumped by 1 percent, the German DAX Index advanced by 0.6 percent and the U.K.'s FTSE 100 Index increased by 0.3 percent.

In the bond market, treasuries showed a lack of direction for much of the session before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2 basis points to 2.746 percent.

Looking Ahead

The Federal Reserve's monetary policy announcement is likely to be in focus on Wednesday, although trading activity may be somewhat subdued in the lead up to the announcement at 2 pm ET.

Nonetheless, AT&T (T), Yahoo (YHOO), and Electronic Arts (EA) may be in focus following the release of their quarterly results after the close of today's trading.