U.S. stocks rose on Tuesday, with the Dow industrials extending gains into a fourth day and the S&P 500 and Nasdaq Composite higher on the month, as investors embraced corporate earnings, a rise in consumer sentiment and anticipated the end of the Federal Reserve's bond buys.
"We build ourselves a wall of worry and make assumptions about consumers, and they tend to come back and surprise us," said Art Hogan, chief market strategist at Wunderlich Securities.
"If you could pick a time in the year when you want a confident consumer, this is it," added Hogan, referring to the holiday shopping season.
"The consumer remains pretty strong, and large-cap, U.S. stocks are a good place to be," said Sean Lynch, an Omaha-based managing director of global equity strategy & research at Wells Fargo Private Bank.
Amgen jumped after hiking its full-year outlook; T-Mobile US climbed after the wireless carrier increased its estimate for subscribers; Twitter shares fell after the social network matched earnings estimates and beat revenue forecasts, but offered disappointing user metrics; Merck & Co. weighed on the Dow, as cost-cutting allowed the pharmaceutical company to beat third-quarter earnings estimates but soft sales of major products hit shares, and International Business Machines said its board had approved a $5 billion share buyback in addition to the $1.4 billion still in its existing program.
"Companies are redeploying their cash on share buybacks and dividends have increased 10 percent year-over-year on the S&P. Guidance has been more optimistic. There are a lot of excuses that could have come in this season, whether Ebola or the stronger dollar, yet we haven seen that so much, which is a good sign," said Lynch.
The Federal Open Market Committee concludes a two-day session on Wednesday, with Fed watchers expecting the central bank to remain on its tapering track.
"We're awaiting tomorrow's FOMC announcement, not in what they're going to do, but in terms of what they'll say. I think they'll stress in a big way that if Europe, or the global economy, weakens further, they'll perhaps rethink QE," said Peter Cardillo, chief market economist at Rockwell Global Capital..