U.S. stocks rose a second day, after equities posted the worst week since 2012, as earnings from Coca-Cola Co. and Johnson & Johnson overwhelmed concerns that tensions in Ukraine are worsening.
The Nasdaq composite index gained 0.3 percent, erasing an earlier drop of 1.9 percent after nearing its average price in the past 200 days.
The Standard & Poor’s 500 Index climbed 0.7 percent 1,842.98, reversing a loss of 0.8 percent. The Dow Jones industrial average gained 89.32 points, or 0.6 percent, to 16,262.05. About 7.7 billion shares changed hands on U.S. exchanges, 10 percent above the three-month average.
The S&P 500 Monday briefly erased a 1 percent gain, as technology shares dipped, before closing higher to halt a two- day slide. The index has dropped 2.5 percent from its April 2 record as selling from Internet and biotechnology stocks, the best performers in a five-year rally, spread to the broader market.
The Nasdaq composite fell Tuesday to within four points of its 200-day moving average of 3,942.50 before reversing. The last time the gauge dropped below that level, considered an important threshold by technical analysts, was Dec. 31, 2012. The index rose 88 points from its low today to the close, the biggest recovery since December, data compiled by Bloomberg show.
The Nasdaq, along with the S&P 500, Dow and Russell 2000 indexes, fell below 10-day through 100-day averages last week. The Russell index of smaller companies sank through its 200-day average Tuesday before reversing to close about 12 points above that level.
The volatility in technology stocks “adds to investor uneasiness,” said Brian Peery, who helps oversee $4.8 billion for Novato-based Hennessy Funds. Peery said his firm has taken advantage of the recent sell-off to add holdings in industrial companies, such as airlines. “The market is going to continue to climb the proverbial wall of worry. There is enough good economic news to support the market moving up higher in slower stages.”
Economic data Tuesday showed manufacturing in the New York region grew at a slower pace in April, while the cost of living in the U.S. rose more than projected in March as food and rents became more expensive.
Yahoo! Inc. (Nasdaq: YHOO) and Intel Corp. (Nasdaq: INTC) advanced in extended trading after reporting results. Yahoo jumped 6.4 percent to $36.39 at 5:17 p.m. in New York as sales surpassed forecasts. The stock also got a boost when Alibaba Group reported a 66 percent jump in revenue. Yahoo owns about 24 percent of the largest Chinese e-commerce company. Intel climbed 2 percent to $27.30 after earnings topped analyst estimates.
The S&P 500 trades at 17 times its members’ reported earnings. While that’s near its highest valuation in four years, it’s close to its weekly average since 1937, data compiled by Bloomberg show.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, fell 3.1 percent to 15.61.
All of the 10 main S&P 500 groups advanced Tuesday, with utility and energy stocks rising 1.3 percent to lead the gains.
Coca-Cola (NYSE: KO) rose 3.7 percent to $40.18 as first-quarter profit met analysts’ estimates. Global sales volume rose 2 percent for the quarter, driven by emerging markets.
CEO Muhtar Kent, facing sluggish soft drink sales in the U.S., has implemented a cost-cutting program to boost earnings and is collaborating with Keurig Green Mountain Inc. (Nasdaq: GMCR) to compete in at-home soda-making.
Johnson & Johnson (NYSE: JNJ) rose 2.1 percent to $99.20, an all-time high. The world’s biggest maker of health care products said first-quarter profit rose 34 percent on demand for the company’s newest drugs.
J&J, the first of the major health care companies to report earnings this quarter, raised its 2014 forecast to $5.80 to $5.90 a share from $5.75 to $5.85 a share, excluding items.
Twitter Inc. (NYSE: TWTR) soared 11 percent, the biggest gain since its first day of trading, to $45.52.
The microblogging company is buying data-analysis company and longtime partner Gnip Inc. for an undisclosed amount.
The deal gives Twitter a bigger share of profits from reselling analytical data. The stock is still 28 percent lower for the year.