Better-than-expected earnings from major companies lifted
benchmarks into positive territory on Tuesday ahead of earnings
reports from big technology companies. The S&P 500 touched
another five year high propelled by positive earnings from major
companies. Meanwhile, existing home sales declined in December.
The materials sector was the major gainer among the S&P 500
industry groups, led higher by better-than-expected earnings from
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The Dow Jones Industrial Average (DJI) gained 0.5% to close the
day at 13,712.21. The Standard & Poor 500 (S&P 500)
surged 0.4% to finish yesterday's trading session at 1,492.56.
The tech-laden Nasdaq Composite Index increased 0.3% to end at
3143.18.The fear-gauge CBOE Volatility Index (VIX) dropped 0.2%
to settle at 12.43. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.2
billion shares, marginally lower than 2012's daily average of
6.45 billion shares. Declining stocks outpaced advancers on the
NYSE; as for 39% stocks that rose, 56% moved lower.
The Street began the shortened trading week on a positive note.
Markets were closed on Monday due to Martin Luther King Jr. Day.
The blue-chip index finished in the green for the third
consecutive day. The index has also gained more than 8% this year
Shares of E I Du Pont De Nemours And Co (NYSE:
) increased 1.8% after its revenue and earnings exceeded the
Street's forecast. However, the company registered a significant
decrease in earnings on account of low electronics and
communication sales. Shares of wireless carrier, Verizon
Communications Inc. (NYSE:
) increased 0.9% even after earnings missed estimates. The
company suffered major losses due to rebuilding and pension costs
owing to Hurricane Sandy. On the other hand, the customer base of
the company reached new highs in the fourth quarter under
Johnson & Johnson's (NYSE:
) results failed to meet expectations in spite of registering
solid earnings on account of higher sales. Shares of The
Travelers Companies, Inc. (NYSE:
) surged 2.2% after registering robust results from the premiums
written and investments categories of its business. In light of
Hurricane Sandy, the number of claims increased as a result of
which it negatively affected the net income of the company.
Hurricane Sandy was also responsible for eroding the profits of a
major airline company, Delta Airlines. It was the worst affected
airline within the industry. In spite of reaping the negative
affects of the storm, the company registered better-than-expected
results. Shares of Delta Air Lines, Inc. (NYSE:
) increased 2.9% as it beat the Street's estimates.
Republicans plan to put forward a bill in the US House of
Representatives on Wednesday for extending the US debt limit till
May 19. This step was accepted by the White House and also played
a role in helping the indices finish in the green territory on
Tuesday. White House Press Secretary Jay Carney said if the
current Republican proposal about the debt ceiling "reaches the
president's desk he would not stand in the way of the bill
Meanwhile, the National Association of Realtors reported that
existing home sales declined 1.0% in December to a seasonally
adjusted annual rate of 4.94 million. This was below the
consensus estimate of 5.11 million. But overall sales in 2012
were highest since 2007. According to Lawrence Yun NAR chief
economist "Record low mortgage interest rates clearly are helping
many home buyers, but tight inventory and restrictive mortgage
underwriting standards are limiting sales."
The Materials Select Sector SPDR (XLB) increased the most, among
the S&P 500 industry groups, gaining 1.1%. Major gainers from
the sector include Rockwood Holdings, Inc. (NYSE:
), Eastman Chemical Company (NYSE:
), FMC Corporation (NYSE:
) and The Dow Chemical Company (NYSE:
) which increased by 1.7%, 0.3%, 1.3% and 0.4%, respectively.