By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- 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 Inc. and Ford Motor Co., and a rise in
consumer confidence lifted sentiment.
The S&P 500 (SPX) closed up 10.94 points, or 0.6%, at
1,792.50, snapping a three-day skid. The Dow Jones Industrial
Average (DJI) gained 90.68 points, or 0.6%, to 15,928.56, breaking
a five-day losing streak.
The Nasdaq Composite (RIXF) finished the choppy trade with
gains, rising 14.35 points, or 0.4%, to 4,097.96.
The Nasdaq 100 index (NDX), which includes the 100 largest
nonfinancial equities listed on the Nasdaq Stock Market, fell 3.3
points, or 0.1% to 3,505.72, largely due to losses in Apple
Inc.
"It looks like markets reacted too much too fast in the past few
days and are now realizing that it was slightly overdone. This kind
of bounce is expected when markets are oversold and calm returns,"
said Rob Stein, CEO of Astor Investment Management.
Speaking about economic data, Stein said underlying trends are
still strong.
"The headline numbers in the durable goods data was lower than
expected, but it is a very volatile measure. The underlying trend
is still robust and continues to grow. As to the consumer
confidence, we tend to discount the index as it is just a survey of
how people feel and has little meaning," Stein said.
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Consumer confidence climbed in January, with assessments of both
the present situation and expectations improving, the Conference
Board said Tuesday. The surprise rise took the index to the 80.7
level, topping the economists' estimate, who expected a slight
decline.
Earlier, stock-index futures had pared gains after disappointing
data on durable goods orders and a small drop in house prices in
December.
Orders for big-ticket U.S. goods sank 4.3% in December and
posted the biggest drop since midsummer, largely because of fewer
bookings for autos, large aircraft and military hardware, the
government said Tuesday. The disappointing report -- economists
expected a 1.8% increase in orders -- could lead to a reduction in
forecasts for fourth-quarter gross domestic product.
U.S. home prices ticked down 0.1% in November, the first decline
in a year, with nine of 20 tracked cities posting price drops as
winter approached, according to data released Tuesday.
Investors will also focus on the Federal Reserve, which begins
its two-day meeting on Tuesday. Most analysts expect the Fed to
continue reducing its bond-buying program by $10 billion a
month.
In earnings news, Apple(AAPL) reported disappointing iPhone
sales in its fiscal second-quarter report after Monday's close and
shares sold off in after-hours trade. Selling did not abate even as
activist investor Carl Icahn announced he bought another $500
million worth of Apple shares. The stock closed down 8% on Tuesday,
weighing on technology-oriented indexes.
Pfizer (PFE) shares gained 2.6% after the pharmaceutical
company's results were above analysts' forecasts. Adjusted earnings
rose 22% to 56 cents per share, and revenue fell 2% to $13.56
billion. Analysts polled by FactSet had expected earnings of 52
cents per share on sales of $13.36 billion.
Ford (F) shares did not react much to estimate-beating quarterly
earnings and revenue. Shares closed virtually unchanged. The firm
reported adjusted fourth-quarter earnings of 31 cents a share and a
rise in revenue to $37.60 billion. The auto maker also said it
expects 2014 pretax profit of between $7 billion and $8
billion.
DuPont(DD) shares reversed earlier gains and closed down 1.1%
even as the company reported its profit doubled in the fourth
quarter year-to-year and beat Wall Street expectations. The
chemical company said it would start a $5 billion share-repurchase
program.
Shares of Seagate Technology Inc. (STX) fell 11.25% after the
computer data-drive company posted a profit below Wall Street
forecasts late Monday.
Yahoo Inc. (YHOO) shares slid 5% in after-hours trade, after the
internet company announced quarterly results that disappointed
investors.
More must-reads from MarketWatch:
What breaking the 50-day average really means
Orders for durable goods fizzle in December
Apple's beating, TPDH and America's 'false dawn' recovery
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