Apple's earning report weighs on tech sector though
US stocks halted its three-day slide on Tuesday, 28 January 2014 as the S&P 500 gained 0.6%. U.S. stocks ended Tuesday with the best gains in two weeks, as indexes rebounded from heavy losses in the previous three sessions. Rising emerging markets, upbeat earnings from Pfizer and Ford Motor and a rise in consumer confidence lifted sentiment.
The Dow Jones Industrial Average gained 90.68 points, or 0.6%, to 15,928.56, breaking a five-day losing streak.The Nasdaq Composite finished the choppy trade with gains, rising 14.35 points, or 0.4%, to 4,097.96. The S&P closed up 10.94 points, or 0.6%, at 1,792.50, snapping a three-day skid.
Although the largest tech company, Apple beat on earnings and revenue, investors were not pleased by below-consensus iPhone sales. In addition, disappointing guidance for the second quarter also factored into the stock's 8.0% loss. The remainder of the technology sector was a bit more mixed as large-cap names like Google, Oracle and Intel posted solid gains while Seagate tumbled 11.3% after missing earnings estimates.
Outside of technology, most other cyclical groups finished ahead of the broader market. Financials ended in the lead while the materials sector was the only cyclical underperformer.
Pfizer shares gained 2.6% after the pharmaceutical company's results were above analysts' forecasts.
Treasuries ended little changed despite showing early losses. The benchmark 10-yr yield settled at 2.75%.
Participation was well below average as only 609 million shares changed hands at the NYSE.
Today's economic data included three reports. Durable goods orders fell 4.3% in December after increasing a downwardly revised 2.6% (from 3.4%). The consensus expected durable goods orders to increase 2.1%. Boeing reported solid aircraft orders in December, and that was expected to carry overall durable goods orders higher for the month. Yet, the official Census data showed aircraft orders, defense and nondefense, down 16.7%. A large portion of the decline was due to seasonal adjustments that naturally occur in December. Excluding transportation, durable goods orders fell 1.6% which was well below the 0.6% gain expected by the consensus. These orders were revised down from an originally reported 1.2% gain in November to a 0.1% increase.
The November Case-Shiller 20-city Home Price Index rose 13.6% while a 13.8% increase had been expected by consensus. This followed the previous month's increase of 13.6%.
The January Conference Board's Consumer Confidence Index increased to 80.7 from a downwardly revised 77.5 (from 78.1) in December. The consensus pegged the Consumer Confidence Index at 77.5. The strengthening in consumer confidence stands in contrast to what the preliminary reading for the January University of Michigan Consumer Sentiment Index showed. That index dropped on weakness in the labor market, increased volatility in equity prices, and higher gasoline prices.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while the FOMC will release its latest policy directive at 14:00 ET.
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