The stock market advanced on Tuesday as earnings season got under way, with the Dow Jones industrial average closing at another nominal record high on a rally in cyclical shares.
With the day’s advance, the Standard Poor’s 500-stock index ended less than two points shy of its nominal record, recovering from steep losses last week.
The strength in the indexes indicates that investors are again using market declines as buying opportunities. The top sectors of the day, technology and energy, are groups that are closely tied to the pace of economic growth.
“It’s encouraging that we’re seeing cyclical sectors lead the rally,” said Joseph Tanious, global market strategist at J. P. Morgan Funds. “It’s a healthy sign — investors believe the market can continue to run higher.”
Among blue-chip technology stocks, Microsoft jumped $1.02, or 3.6 percent, to $29.61 as the Dow’s top percentage gainer. Intel shares shot up 66 cents, or 3.1 percent, to $21.75, and Hewlett-Packard rose 29 cents, or 1.3 percent, to $22.22.
The Dow industrials rose 59.98 points, or 0.41 percent, to close at 14,673.46. The S. P. 500 gained 5.54 points, or 0.35 percent, to 1,568.61. The Nasdaq composite index added 15.61 points, or 0.48 percent, to 3,237.86.
While only 5 percent of S. P. 500 companies have reported results so far, almost three-quarters of those have topped expectations, according to Thomson Reuters data. Still, profits are seen rising just 1.5 percent from the year-ago quarter, down from estimates in January for growth of 4.3 percent.
“Expectations have gotten managed down to the point where we could more easily see companies beat expectations, making it easier for us to pop,” said Kristen Scarpa, an investment strategist at Barclays.
Late Monday, Alcoa reported earnings that beat expectations, though revenue was below forecasts. Shares of Alcoa, which as part of the Dow is unofficially seen as setting the tone for the earnings season, closed flat on the day at $8.39.
First Solar, which surged $12.31, or 45.5 percent, to $39.35, was the S. P. 500’s top gainer by far after forecasting 2013 earnings and revenue well above expectations.
The news lifted the solar sector, with Yingli Green Energy climbing 39 cents, or 21.1 percent, to $2.24, and Trina Solar up 56 cents, or 14.6 percent, at $4.40.
Recent reports have shown that the American economy is growing at a slow pace. The March employment report on Friday showed job creation was less than half of what economists had expected. Analysts said, however, that the market has the momentum to push indexes higher, even with the Dow industrials up 12 percent so far this year and the S. P. 500 up 10 percent.
J. C. Penney was the S. P. 500’s largest percentage loser, tumbling $1.94, or 12.2 percent, to $13.93 after the department store’s board ousted Ron Johnson as chief executive and replaced him with his predecessor, Myron E. Ullman.
Shares of Herbalife fell $1.44, or 3.8 percent, to $36.95 after it said that KPMG had resigned as its independent accountant. One of KPMG’s senior partners in the firm’s Los Angeles office was accused of leaking secret information to a stock trader about Herbalife and the footwear company Skechers USA. The accounting firm said Monday night that it had fired the partner.
In the bond market, interest rates showed little change. The price of the Treasury’s 10-year note slipped 2/32, to 102 8/32, while its yield held steady at 1.75 percent.
Article source: http://www.nytimes.com/2013/04/10/business/daily-stock-market-activity.html?partner=rss&emc=rss
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