Stock prices rose again Tuesday as investors responded to corporate earnings reports and economic updates.
The Dow Jones Industrial Average gained 86.63 points to 16,535.37, just 41 points away from an all-time high. The Nasdaq composite index was up 29.14 points to 4,103.54 and the S&P 500 stock index rose 8.90 points to 1,878.33.
The Dow Industrials benefited from a 3.6 percent increase in shares of Merck & Co. (NYSE: MRK) to $58.72, a five-year high, following a strong quarterly earnings report.
Commodities continued to trade in a narrow range. Oil gained 44 cents to $101.28 a barrel and gold dropped $2.70 to $1,296.30 an ounce.
Yahoo! Inc. (Nasdaq: YHOO) and TripAdvisor Inc. (Nasdaq: TRIP) jumped at least 4.6 percent to pace gains in Internet shares. Merck (NYSE: MRK) rose 3.6 percent as earnings were helped by cuts in spending on promotions and research. Sprint (NYSE: S) added 11 percent after sales beat estimates as the company held onto more subscribers than forecast. Coach Inc. (NYSE: COH) fell 9.3 percent after sales at its North American stores plunged 21 percent amid increased competition and bad weather.
“Earnings have been strong and for the most part, companies have been upbeat with their full-year earnings outlooks,” said Steven Rees, head of U.S. equities at JPMorgan Private Bank, which oversees $992 billion in assets. “Data on earnings and today’s data on consumer confidence means you won’t hear much change from the Fed. The next catalyst in the market will be Friday’s jobs report.”
Twitter Inc. (NYSE: TWTR) climbed 4.6 percent to $42.62 during regular trading. After the market close, the shares lost 8.7 percent after the microblogging service said membership in the first quarter reached 255 million, with user growth slowing to 25 percent from 30 percent in the previous period.
EBay Inc. (Nasdaq: EBAY) slumped 3.1 percent in New York as the world’s biggest online marketplace said sales in the current period will be $4.33 billion to $4.43 billion, while adjusted profit will be from 67 cents to 69 cents a share. Analysts on average projected revenue of $4.4 billion and profit of 70 cents. The shares rose 1.7 percent to $54.54 earlier in the day.
Other technology stocks that have been the focus of selling rallied during regular trading. Facebook Inc. (Nasdaq: FB) climbed 3.6 percent to $58.15, ending an 11 percent drop over four days. Google Inc. (Nasdaq: GOOG) Class C shares gained 2.6 percent to $536.33, snapping a 4.1 percent drop over the same period.
About 74 percent of the 279 S&P 500 members that have reported earnings so far this season have posted profit that exceeded analysts’ estimates, data compiled by Bloomberg show. FedEx Corp. (NYSE: FDX), General Motors Co. (NYSE: GM) and McDonald’s Corp. (NYSE: MCD) have all blamed weather for poor earnings performance as snowstorms during the first three months of the year slowed shipments and kept shoppers indoors.
The Fed’s policymakers began a two-day meeting Tuesday in Washington. At the conclusion, they will probably announce a fourth consecutive reduction to their monthly bond-buying program designed to stoke the economy, according to economists polled by Bloomberg. Policymakers will likely keep their target interest rate for overnight bank lending in a range of zero to 0.25 percent.
“The economy is in a sweet spot,” said Patrick Spencer, who helps oversee more than $100 billion as London-based head of equity sales at Robert W. Baird & Co. “Growth isn’t so exuberant that the Fed needs to withdraw their support quickly, and not so anemic that they need to be concerned about further weakening.”
Merck rose 3.6 percent to $58.72. The second-biggest U.S. drugmaker posted first-quarter profit excluding certain items of 88 cents a share, 9 cents above the average of 16 analysts’ estimates compiled by Bloomberg. Sales were $10.3 billion, down from $10.7 billion a year earlier.
Sprint (NYSE: S) jumped 11 percent, its biggest gain since at least July, to $8.27. Sales topped analysts’ estimates as the company held onto more subscribers than forecast in the face of cheaper wireless plans from T-Mobile US Inc. (NYSE: PCS) and AT&T Inc. (NYSE: T). The carrier raised its full-year forecast.
Coach lost 9.3 percent, the most since January 2013, to $45.71. U.S. retailers of all stripes have been hampered by repeated winter storms and weak store traffic, while Coach also faces stepped-up competition in the handbag segment from Michael Kors Holdings Ltd. (NYSE: KORS).
Gogo Inc. (Nasdaq: GOGO) plunged 29 percent to $13.12 after AT&T Inc. said it will offer Internet access on airplanes in a direct challenge to the inflight Wi-Fi provider.