U.S. Stocks Add to Gains as Company Earnings Reports Impress

(AP) -
The floor of the New York Stock Exchange, Tuesday. (Reuters/Brendan McDermid)

U.S. stocks moved sharply higher in afternoon trading Tuesday, adding to the market’s gains from a day earlier. Technology stocks, retailers and other consumer-focused companies accounted for much of the rally. Gains by industrial and health care stocks also helped lift the market. Investors were weighing mostly upbeat corporate earnings reports and economic data.

KEEPING SCORE: The S&P 500 index rose 27 points, or 1 percent, to 2,705 as of 12:43 p.m. Eastern Time. The Dow Jones industrial average gained 221 points, or 0.9 percent, to 24,794. The Nasdaq composite climbed 119 points, or 1.7 percent, to 7,276. The Russell 2000 index of smaller-company stocks picked up 17 points, or 1.1 percent, to 1,580.

THE QUOTE: “Even though we’re early in the earnings season, the fact that we continue to see good earnings and earnings growth come out is really what’s driving the market,” said Nana Adae, global investment specialist at J.P. Morgan Private Bank. “Earnings growth ties to fundamentals, and fundamentals are key.”

BINGEWORTHY: Netflix jumped 9.5 percent to $336.90 after the video streaming service said it gained 7.4 million subscribers in the first quarter — more than analysts expected.

LOOKING HEALTHY: UnitedHealth climbed 3 percent to $237.26, after it reported a 31 percent jump in first-quarter profit, and said it gained Medicare Advantage and Medicaid customers. The nation’s largest health insurer also raised its forecast for 2018.

GOOD CHEMISTRY: Celanese gained 4 percent to $110.66 after the chemical company’s latest results beat analysts’ estimates. The company also raised its annual forecasts.

MIXED RESULTS: Shares in Johnson & Johnson fell 1.5 percent to $129.83 after much-higher spending and one-time charges offset a big jump in the company’s first-quarter revenue.

SHORTCIRCUITED: Tesla Motors slid 0.9 percent to $288.49 on reports that it has stopped production of its lower priced Model 3 sedan.

ON THE ECONOMY: The International Monetary Fund upgraded its economic outlook for the United States in 2018, forecasting that the U.S. economy will grow 2.9 percent this year, up from the 2.7 percent it had forecast in January, and from the 2.3 percent growth the economy achieved last year. The Federal Reserve said that U.S. factory output rose slightly last month. Meanwhile, the Commerce Department said that housing starts rose in March to a seasonally adjusted annual rate of 1.32 million. Homebuilders rose. Hovnanian Enterprises was among the biggest gainers, climbing 2.9 percent to $1.99.

ENERGY: Benchmark U.S. crude held steady at $66.22 a barrel on the New York Mercantile Exchange. Brent Crude, used to price international oils, slipped 7 cents to $71.35 per barrel.

BOND YIELDS: Bond prices were little changed. The yield on the 10-year Treasury held at 2.83 percent.

CURRENCIES: The dollar fell to 107.04 yen from 107.10 yen late Monday. The euro fell to $1.2346 from $1.2381.

OVERSEAS: Major indexes in Europe posted gains. Germany’s DAX climbed 1.7 percent, while France’s CAC 40 rose 0.9 percent. Britain’s FTSE 100 added 0.5 percent. In Asia, Japan’s benchmark Nikkei 225 edged 0.1 percent higher, while Australia’s S&P/ASX 200 was unchanged. South Korea’s KOSPI lost 0.2 percent. Hong Kong’s Hang Seng shed 0.9 percent, after new data showed China’s economic growth held steady in the first quarter.