Stocks End Mixed, Nasdaq Falls for 5th Session
Stocks closed mixed Tuesday, ending off their session highs, as euphoria from this morning's earnings reports faded and as tech giant Apple slumped, weighing on the Nasdaq.
The Dow Jones Industrial Average rose 74.39 points, or 0.58 percent, to close at 13,001.56, led by AT&T and GE . However, Wal-Mart extended losses from the previous day's selloff following news of bribery allegations at the retailer's Mexican affiliate surfaced.
The S&P 500 edged up 5.03 points, or 0.37 percent, to end at 1,371.97. The Nasdaq slipped 8.85 points, or 0.30 percent, to finish at 2,961.60, logging its fifth-straight decline.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 19.
Among the key S&P sectors, telecoms and industrials logged a gain, while techs declined.
“There’s no question this first quarter of earnings is coming in much stronger than expected, and we’re seeing average growth rates across all sectors,” said Rich Weiss, senior vice president and portfolio manager at American Century Investments on CNBC's "Street Signs." “[But] the very strong earnings are arguably being weighed down by some of the macroeconomics, globally speaking. So clearly it’s a battle.”
IBM climbed after the tech giant raised its quarterly dividendby 13 percent and authorized an additional $7 billion stock buyback.
Corporations continued to post positive surprises in their earnings reports. AT&T and 3M gained after both Dow components posted quarterly profits that beat Wall Street expectations. Fellow Dow 30 member United Technologies beat on earnings but missed on revenue. (Click here to track results.)
Apple, however, slumped for the 10th session out of the last 11 ahead of its earnings report after-the-bell following several reports are pointing to a weaker-than-expected quarterfor the tech giant's iPhone sales. Wall Street analysts expect earnings of $10.02 a share on revenue of $36.7 billion, according to Thomson Reuters.
“If [Apple] doesn’t smash numbers, the stock is going to go down,” said Colin Gillis, senior technology analyst at BGC Financial on CNBC’s “Squawk on the Street." “The fast money has moved into this name, so if there’s any hiccup, it’s going to trade off.”
Juniper surged after the networking equipment maker posted earnings that topped estimates.
So far, 153 S&P 500 firms have reported earnings, with 76.5 percent of companies topping Wall Street expectations, according to data from Thomson Reuters.
Amgen and Baidu are among other notable companies that are expected to post after-the-bell.
Netflix took a steep tumble after the online movie-viewing company said it expects slower subscriber growth in the current quarter for its key video-streaming service. The firm posted a quarterly loss, but was not as steep as expected.
RadioShack slumped to its lowest intraday level in over 30 years after the consumer electronics retailer swung to a quarterly loss, hurt from weakness in its Sprint postpaid wireless business and weak demand for prepaid phones.
Big Lots plunged to lead the S&P 500 laggards after the retailer warned that it now projects a slide in same-store salesfor the quarter, hurt by soft sales in late March into April. At least two brokerages cut their price target on the firm, while another three lowered their ratings.
On the economic front, home prices dropped in Februaryfor a sixth straight month, according to the Standard & Poor's/Case-Shiller home-price index.
New home sales slid 7.1 percent in March to a seasonally adjusted 328,000-unit rate, hitting their lowest level in four months, according to the Commerce Department. Still, the reading topped expectations for a 320,000-unit rate, according to a Reuters poll.
And consumer confidence dipped slightly in Aprilto 69.2 from a downwardly revised 69.5 in March, according to the Conference Board.
European shares closed higherafter hitting a 3-month low in the previous session. Investor sentiment was lifted by the Netherlands' successful $2.6 billion bond auction on Tuesday, despite the collapse of the Dutch government on Monday.
Treasury prices held their lossesafter the government auctioned $35 billion in 2-year notes at high yield of 0.270 percent and a bid-to-cover of 3.76.
And the Federal Reserve’s Open Market Committee begins a two-day meeting, with the latest interest rate decision and statement due on Wednesday.
“We’re past the point where low interest rates help the economy—this economy is not lacking for liquidity, this economy is lacking confidence,” said David Kelly, chief market strategist at JPMorgan Funds. “The reason why I think they should raise rates is not because I think the economy can take it, it’s because I think it will help the economy…The Federal Reserve needs to say the ‘patient will get better.’”
—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC—
Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, FOMC meeting announcement, 5-yr note auction, Bernanke press conference, Coca-Cola shareholders meeting, GE Shareholders meeting, Hudson City shareholders meeting, USDA food prices outlook; Earnings from Boeing, Caterpillar, Eli Lilly, GlaxoSmithKline, AutoNation, Delta, Credit Suisse, Motorola Solution, Sprint, Akamai
THURSDAY: Jobless claims, Chicago Fed nat'l index, pending home sales index, 7-yr note auction, J&J shareholders meeting; Earnings from AstraZeneca, Bristol-Myers Squibb, Chrysler, ExxonMobil, PepsiCo, Royal Dutch Shell, Barclays, Pulte, Amazon.com, Starbucks, Zynga
FRIDAY: GDP, employment cost index, consumer sentiment; Earnings froM Chevron, Merck, P&G
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