Stocks were mixed Tuesday as blue chip issues moved closer to all-time highs.
The Dow Jones Industrial Average rose 47.46 points to 14,018.70, its highest close since Oct. 12, 2007. The index is now 1.0 percent away from its record close of 14,164 and is up 7.0 percent since the start of 2013.
The Nasdaq Composite Index fell 5.51 points to 3,186.49 and the S&P 500 Stock Index gained 2.42 points to 1,519.43.
Investors were relatively cautious ahead of the State of the Union address by president Obama. There was little else in economic news to move the markets.
Commodities were steady as oil gained 48 cents to $97.71 a barrel. Gold rose 50 cents to $1,649.60 an ounce.
Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C) gained at least 2.8 percent as banks rallied. Avon Products Inc. (NYSE: AVP) soared 20 percent amid better-than-estimated profit and a plan to consider options for its Silpada jewelry unit. Michael Kors Holdings Ltd. (NYSE: KORS) rose 8.8 percent after raising its forecast in anticipation of a jump in same-store sales. Coca-Cola Co. (NYSE: KO) fell 2.7 percent as volume sales missed forecasts. Apple Inc. (Nasdaq: AAPL) lost 2.5 percent.
“This market is front-running better economic and earnings news,” John Augustine, who helps manage $27 billion as chief market strategist at Cincinnati-based Fifth Third Bancorp (Nasdaq: FITB), said in a phone interview. “We all think of a correction coming in February. Guess what, we probably won’t get a correction in February. This market has got upward momentum.”
About 74 percent of the 355 companies in the S&P 500 that have released results during the earnings season have exceeded profit projections, and 66 percent have beaten sales estimates, data compiled by Bloomberg show.
“Every strategist I’ve talked to says that we’re due for a 5 percent, 7 percent correction, and the reason why we haven’t seen it is because investors are buying on dips,” Diane Jaffee, the N.Y.-based group managing director for U.S. equities who oversees about $5.9 billion in assets at TCW Group Inc., said in a phone interview. “The thought process is that people are willing to forgo the first 10 or 20 percent of the market rise to make sure it will really do it, and now they want in for the last 20 or 30 percent because they have more confidence.”
Obama is due to deliver his State of the Union address at 9 p.m. in Washington. He will make proposals for spending on infrastructure, clean energy and education, according to an administration official briefed on the speech. Obama will argue that fostering economic growth remains the best strategy to narrow a federal budget gap that has exceeded $1 trillion in each of the last four years.
Masco Corp. (NYSE: MAS) rallied 12 percent to $20.01 for the second- largest gain in the S&P 500. The home improvement and building products maker reported fourth-quarter earnings and sales that exceeded analysts’ estimates.
An S&P 500 gauge of homebuilders advanced 4.5 percent, the most since December, as all of its 11 members gained. D.R. Horton Inc. (NYSE: DHI) jumped 4.9 percent to $24.05, PulteGroup Inc. (NYSE: PHM) added 5.3 percent to $20.32 and Lennar Corp. (NYSE: LEN) increased 4.1 percent to $40.87.
Fossil Inc. (Nasdaq: FOSL) rose 3 percent to $110.65 after the maker of the namesake watch brand said its fourth-quarter sales increased 14 percent to a record $947.7 million, surpassing estimates.
J.M. Smucker Co. (NYSE: SJM) gained 2.5 percent to $90.92 after the Orrville, Ohio-based food products company was raised to outperform, the equivalent of a buy, from market perform by Alexia Howard, an analyst with Sanford C. Bernstein & Co.
Facebook Inc. (Nasdaq: FB) declined 89 cents to $27.37. Carlos Kirjner, an analyst at Sanford C. Bernstein in New York, downgraded the stock to market perform, the equivalent of hold, from outperform, citing a potential slowdown in price-per-ad growth in North America and Europe. BTIG LLC analyst Rich Greenfield also cut the social network, to sell from neutral, saying its mobile growth was not enough.
Dun & Bradstreet Corp. (NYSE: DNB) sank 7.7 percent, the most in the S&P 500, to $78.68. The 171-year-old provider of business data and risk-management services reported fourth-quarter earnings that missed analysts’ estimates on sluggish North American sales.