Wall Street edges up as results ease anxiety over earnings

By Tanya Agrawal

REUTERS - U.S. stocks edged up on Tuesday for the second straight day as a spate of companies beat lowered earnings expectations, helping to ease fears of a disappointing quarter.

A majority of the top 10 S&P 500 sectors were up, with the health index leading the gains following Teva Pharmaceutical's bid for Mylan .

Mylan rose as much as 9.4 percent to a record high of $74.44 after Israeli drugmaker Teva made an unsolicited offer of $82 per share, in what could be the drug industry's largest takeover this year. Teva rose 2.7 percent to $65.01.

Mylan was the highest traded stock on the Nasdaq with nearly 13 million shares traded.

 

Nearly 75 percent of the S&P 500 components that have reported earnings so far have beat analyst expectations, topping the 70 percent average in the last four quarters. However, just 45.8 percent have beat on revenue, compared with the 58 percent average top line beat over the last year.

At 9:45 a.m. EDT (1345 GMT) the Dow Jones industrial average rose 12.59 points, or 0.07 percent, to 18,047.52, the S&P 500 gained 3.63 points, or 0.17 percent, to 2,104.03 and the Nasdaq Composite was unchanged.

Dow components Verizon , DuPont and United Technologies beat expectations even as the strong dollar weighed on the results of DuPont and UTX. Verizon shares were down 1.4 percent at $48.65, DuPont fell 2.5 percent to $71.07 and United Technologies added 1.5 percent to $118.29.

The dollar is up almost 9 percent since the beginning of the year against a basket of major currencies <.DXY>. A strong dollar hurts companies with large overseas operations.

"Market is in momentum mode and is taking the path of least resistance," said Brian Fenske, head of sales trading at ITG in New York. "It's still early in the week and things could change with some major tech stock reporting later in the week but there has been the absence of a real negative factor."

IBM shares were down 0.5 percent at $165.35 after its earnings exceeded low expectations on Monday as it shed unprofitable businesses to focus on cloud-computing.

Earnings expected later on Tuesday include Chipotle , Yahoo and Yum Brands .

Hedge fund manager David Einhorn's Greenlight Capital has taken a new stake in General Motors Co , nearly a year after selling off it position in the automaker, the firm said in a letter to clients on Monday. GM shares were little changed at $37.06.

Advancing issues outnumbered declining ones on the NYSE by 1,618 to 1,059, for a 1.53-to-1 ratio on the upside; on the Nasdaq, 1,325 issues rose and 931 fell for a 1.42-to-1 ratio favoring advancers.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)