Stocks mixed as investors await earnings
EmptyNEW YORK -- Stocks edged higher Tuesday as investors refrained from major moves ahead of first-quarter earnings reports that began with Alcoa Inc.'s results after the closing bell. A modest increase in the Dow Jones industrials marked the eighth-straight win for the blue chip index, its first such streak since 2003.
Aluminum producer Alcoa reported a better-than-expected first-quarter profit, pleasing investors who bid the company's stock up in after-hours trading. Wall Street was looking for results from the Dow component to not only gauge the pace of earnings for the quarter but as a proxy for the health of the overall economy.
Tuesday was the second day in a row that stocks showed little overall movement as investors awaited news of how companies fared during the first quarter, and also their expectations for the coming quarters. In the fourth quarter, Standard & Poor's 500 companies snapped an 18-quarter streak of double-digit profit gains, and Wall Street expects profit growth to remain in the single digits for the first three months of the year.
"A lot of people are going to be watching earnings very closely and not just the numbers, but the guidance that they give going forward," said J. Michael Barron, chief executive of Knott Capital. "I think that will be crucial."
With no major economic data scheduled, investors looked to speeches by Federal Reserve officials to get a better idea of where the central bank stands on inflation and interest rates. A stronger-than-expected jobs report Friday dashed some investors' hopes that the central bank will soon lower interest rates.
The Dow rose 4.71, or 0.04%, to 12,573.85.
Broader stock indicators edged higher. The S&P 500 rose 3.78, or 0.26%, to 1,448.39, and the Nasdaq composite index advanced 8.43, or 0.34%, to 2,477.61.
Bonds continued their recovery, with the yield on the benchmark 10-year Treasury note falling to 4.72% from 4.75% late Monday. Bonds fell sharply Friday after release of the government's jobs report. Gold prices rose, while the dollar was mixed against other major currencies.
Oil prices rose after selling off Monday following doubts about Iran's comments about its uranium enrichment achievements. A barrel of light, sweet crude for delivery on the New York Mercantile Exchange rose 38 cents to settle at $61.89.
"I think we're all anticipating the earnings season. I think everyone is going to wait on their heels and see how the numbers are going to come through," said Tim Hartzell, chief investment officer at Kanaly Trust Co.
He contends investors are perhaps too dour in their assessment of corporate earnings, though he is waiting to get a sense of how the numbers stack up before making any big moves. He noted companies' cash flows remain strong. He also expects companies will continue to repurchase stock, which could help boost per-share profit figures.
"We're just waiting to see what the numbers are before we do any buying and selling," he said.
As they awaited earnings news, investors examined comments from Fed governors but appeared unmoved.
Fed Gov. Frederic Mishkin said Tuesday that inflation expectations remain "well anchored" and said inflationary pressure have been "falling back again."
Dallas Fed President Richard Fisher said the U.S. economy has been growing but that its expansion is slowing. He also said inflation remains stubbornly high.
Investors were also awaiting minutes due Wednesday from the Fed's most recent meeting at which it left short-term interest rates unchanged for the sixth straight time. The Fed has been standing pat on interest rates following a string of 17 straight increases that began in 2004.
Comments issued after the Fed's March meeting sent stocks soaring; many investors saw the Fed as indicating it was opening the door to a rate cut.
Alcoa, which rose 3 cents to $34.90 in regular trading, picked up another 50 cents in extended dealings after releasing its earnings announcement.
Dow Chemical Co. fell $1.12, or 2.4%, to $45.51 after the chemical and plastics maker said it has had no discussions about a leveraged buyout. A British newspaper reported over the weekend that a group of Middle Eastern investors and U.S. buyout firms was preparing a $50 billion bid.
Citigroup Inc. rose 82 cents to $52.40 ahead of a major restructuring announcement in which some 26,000 workers will be reassigned or see their jobs eliminated, according to a report by The New York Times. Chief Executive Charles Prince is scheduled to announce the plan on Wednesday.
D.R. Horton Inc., the nation's largest homebuilder by deliveries, said its second-quarter sales orders fell 37%, led by even steeper declines in California and the Southwest. Shares fell 34 cents to $21.70.
Adolor Corp. fell $5.12, or 58.7%, to $3.60 after the biopharmaceutical company suspended clinical studies and withdrew an application for a constipation-relief drug.
Shares of drug maker Mylan Laboratories Inc. jumped 60 cents, or 2.8%, to $21.80 after the company raised its profit forecast, citing continued strength in its generics business and new product sales.
Advancing issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange, where volume came to 1.33 billion shares compared with 1.26 billion traded Monday.
The Russell 2000 index of smaller companies rose 2.87, or 0.35%, to 814.51.
Overseas, Japan's Nikkei stock average closed down 0.45%. At the close, Britain's FTSE 100 rose 0.32%, Germany's DAX index rose 0.94%, and France's CAC-40 rose 0.43%.