Stocks Finish Higher Amid Earnings Flurry, Rising Oil
Stocks ended the day higher as investors evaluated a mixed batch of quarterly earnings reports and energy stocks moved higher on a spike in oil prices.
The Dow Jones Industrial Average and the S&P 500 all closed higher but an afternoon pullback in the Nasdaq kept the tech-heavy index just above the flat line.
"The market acted pretty well, we're seeing some buyers come in. We definitely saw some momentum today, as long as oil is below $60 the market is fine," said Todd Leone, head of listed trading at Cowen & Company.
"I think we had a little bit of a selloff yesterday due to expirations. Yesterday was Blue Monday, which is supposed to be the most depressing day of the year and it certainly was depressing, but the market acted better today."
Leone added that some traders may have been afraid to buy stocks ahead of President Bush's State of the Union address, scheduled for Tuesday evening.
Energy stocks posted strong gains Tuesday amid a rebound in oil prices. Crude oil prices ended just below $55 per barrel on the New York Mercantile Exchange; President Bush said he will seek to double the Strategic Petroleum Reserve to 1.5 billion barrels by 2027.
Wachovia Securities' chief equity strategist, Doug Sandler, told CNBC's "Closing Bell" that today's session was one for the contrarians as downtrodden segments such as oil and gas, semiconductors and homebuilding saw strong reversals.
"If you were betting with the rest of the market, today was a real painful day for a lot of investors," he said. "People get stacked on one side of a trade and the whipsaw can be pretty violent during earnings season."
ExxonMobil was a big Dow gainer. United Technologiesreported solid fourth-quarter earnings and was the leading Dow component.
Another Dow component, Pfizer, dragged down healthcare stocks after Bear Stearns cut its rating on the drug giant, citing a "deterioration of earnings quality."
Other actively traded stocks included AMR , the parent company of American Airlines, and computer storage titan EMC , which saw a modest gain on solid fourth-quarter results, announced this morning.
AMR shares fell sharply after the company announced a public offering of 13 million shares in order to raise about $503 million. The parent company of rival United Airlines, UAL Corp. , reported a quarterly loss of $61 million adding to negative investor sentiment.
Apple Computer saw its shares decline 1.3% as CEO Steve Jobs is questioned by federal securities regulators regarding stock options backdating.
The Conference Board said Tuesday morning an indicator of future economic activity rose in December, its fastest pace since September.