U.S. stocks closed higher Tuesday, with the Nasdaq finishing above 8,000 for the first time in six months, as investors parsed a fresh batch of corporate earnings for clues on the broader economy.
What did major indexes do?
The Dow Jones Industrial Average DJIA, +0.26% rose 67.89 points, or 0.3%, to 26,452.66, while the S&P 500 index SPX, +0.05% gained 1.48 points to 2,907.06.
The Nasdaq Composite Index COMP, +0.30% climbed 24.21 points, or 0.3%, to 8,000.23, closing above the psychologically important 8,000-mark for the first time since Oct. 3.
Read: Stock market at ‘risk of a melt-up, not a meltdown,’ warns BlackRock’s Larry Fink
What drove the market?
Investors pored over earnings reports released early Tuesday, with Bank of America Corp. BAC, +0.13% following on the lead of Goldman Sachs Group Inc. GS, +0.97% and Citigroup Inc. C, +2.86% , issuing earnings that failed to surpass analysts’ low expectations in the first quarter.
Dow component UnitedHealth Group Inc. UNH, -4.01% initially rose after it beat revenue and profit expectations for the first quarter while boosting its full-year outlook. But the stock quickly surrendered those gains on concerns over threats that new health-care reform measures, like “Medicare for All,” could significantly hurt health-insurance industry profits. The stock fell 4%.
Read: Bernie Sanders’s ‘Medicare for All’ gets cheers at Fox News town hall
Last Friday, presidential hopeful Sen. Bernie Sanders of Vermont called out UnitedHealthcare, a $180 billion division of UnitedHealth, CEO Steve Nelson by name in a tweet that linked to a Washington Post story on insurers working to pull Democrats away from Medicare for All.
Analysts have penciled in a year-over-year decline in S&P 500 corporate profits for the first quarter, which would mark the first fall in three years.
Industrial production fell 0.1% in March, below the 0.1% rise expected by economists surveyed by MarketWatch. The same report showed capacity utilization falling to 78.8% in March, the lowest since last July, and below expectations of 79.1%
Home-builder sentiment rose to a six-month high in April, according to the National Association of Home Builders’ monthly confidence index, which rose to 63, up from 62 in March.
What did analysts say?
“The market is completely focused on earnings,” said Eric Kuby, chief investment officer for North Star Investment Management. “Companies really lowered their guidance coming into earnings season, and we’re getting to the point where companies are doing a good job of stepping over that lowered bar.”
“The tone of [UnitedHealth Group’s] outlook, and particularly the political overhang, is preventing them from rallying on good past performance,” he added.
“Of the 10 companies that have reported earnings this morning, nine have exceeded earnings-per -share forecasts and one reported results that were in line with expectations,” said Paul Hickey of Bespoke Investment Group, in a note to clients.
“While the revenue beat rate this morning hasn’t been nearly as strong (60%), it hasn’t been bad either,” he added. “Those positive results coupled with a big rally in Asia overnight has…the S&P 500 on pace for a new year-to-date high with all-time highs not too far away.”
What stocks were in focus?
Johnson & Johnson JNJ, +1.10% rose 1.1% after the consumer and health-care product company topped Wall Street expectations for revenue and earnings in the first quarter.
Shares of AT&T Inc. T, +0.72% edged up 0.7% after the telecommunications giant said late Monday that it had sold its minority stake in Hulu back to the streaming-video joint venture. The deal valued Hulu at $15 billion, with AT&T’s 9.5% interest valued at $1.43 billion.
BlackRock Inc. BLK, +3.25% stock rose 3.3% after the money manager posted revenue and earnings for the first quarter that fell less than analysts had anticipated.
Shares of Expedia Group Inc. EXPE, +0.43% gained 0.4% after the company said that it has entered into an agreement to acquire Liberty Expedia Holdings Inc. LEXEA, -0.18% in an all-stock deal.
Qualcomm Inc. QCOM, +23.21% shares soared 23% on news that it reached a deal with Apple Inc. AAPL, +0.01% to drop all lawsuits, with Apple paying an undisclosed sum in the settlement. Apple shares were mostly flat.
How did other markets trade?
Stocks in Asia rallied, with China’s Shanghai Composite SHCOMP, +2.39% index closing 2.4% higher. Japan’s Nikkei 225 NIK, +0.22% rose 0.2%, while Hong Kong’s Hang Seng Index HSI, +1.07% added 1.1%.
European stocks also rose, with the Stoxx Europe 600 SXXP, +0.29% up 0.3%.
In commodity markets, the price of oil CLK9, +0.58% was higher and gold GCM9, +0.08% settled at its lowest of the year. The U.S. dollar DXY, +0.06% meanwhile, edged up.
—William Watts contributed to this report
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