Earnings News Results In Mixed Close On Wall Street - U.S. Commentary

(RTTNews) - After turning higher over the course of the previous session, the major averages moved in opposite directions during trading on Tuesday. While the Dow and the S&P 500 saw further upside, the Nasdaq pulled back into negative territory.

The tech-heavy Nasdaq ended the session well off its worst levels of the day but still closed down 19.69 points or 0.4 percent at 4,940.33. Meanwhile, the Dow rose 49.44 points or 0.3 percent to 18,053.60, and the S&P 500 climbed 6.46 points or 0.3 percent to 2,100.80.

With the gains on the day, the Dow and the S&P 500 extended the upward trend seen in recent sessions, reaching their best levels in months.

The Dow climbed to its best closing level since last July, while the S&P 500 rose to a nearly five-month closing high.

The gain by the Dow was partly due to strong performances by Goldman Sachs (GS), UnitedHealth (UNH), and Johnson & Johnson (JNJ), which moved higher after reporting better than expected first quarter earnings.

Meanwhile, a steep drop by shares of IBM (IBM) limited the upside for the blue chip index. IBM slumped by 5.6 after reporting first quarter earnings and revenues that fell year-over-year.

Shares of Illumina (ILMN) and Netflix (NFLX) also came under pressure on the day, contributing to the pullback by the Nasdaq.

Illumina plummeted by 23.2 percent after warning of weaker than expected first quarter revenue, while Netflix tumbled by 13 percent after providing disappointing subscriber growth guidance.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing a sharp pullback in housing starts in the month of March.

The report said housing starts tumbled by 8.8 percent to an annual rate of 1.089 million in March after jumping by 6.9 percent to a revised 1.194 million in February.

Economists had expected housing starts to dip by about 0.9 percent to a rate of 1.167 million compared to the 1.178 million originally reported for the previous month.

Building permits, an indicator of future housing demand, also slumped by 7.7 percent to a rate of 1.086 million in March from a revised 1.177 million in February.

The decrease surprised economists, who had expected building permits to climb 2.8 percent to a rate of 1.200 million from the 1.167 originally reported for the previous month.

Sector News

Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 4.1 percent. With the jump, the index reached its best closing level in well over a year.

The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for June delivery surging up $19.30 to $1,254.30 an ounce.

Considerable strength was also visible among energy stocks, which benefited from an increase by the price of crude oil. Crude oil for May delivery jumped $1.30 to $41.08 a barrel, as an oil workers strike has slashed production in Kuwait.

Within the energy sector, oil service stocks posted particularly strong gains, resulting in a 4.4 percent gain by the Philadelphia Oil Service Index.

Steel stocks also turned in a strong performance on the day, with the NYSE Arca Steel Index soaring by 4 percent to a nine-month closing high.

Chemical, railroad, airline, and banking stocks also moved notably higher, while significant weakness was visible among biotechnology, internet, and semiconductor stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region showed a strong move back to the upside on Tuesday. Japan's Nikkei 225 Index surged up by 3.7 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.

The major European markets also moved notably higher on the day. While the German DAX Index soared by 2.3 percent, the French CAC 40 Index shot up by 1.3 percent and the U.K.'s FTSE 100 Index advanced by 0.8 percent.

In the bond market, treasuries turned in a relatively lackluster performance before closing slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 1.783 percent.

Looking Ahead

Additional housing data is scheduled to be released on Wednesday, with the National Association of Realtors due to release its report on existing home sales in March.

Trading may also be impacted by reaction to earnings news from Intel (INTC) and Yahoo (YHOO), which are releasing their quarterly results after the close of today's trading.

Beverage giant Coca-Cola (KO) is also due to report its first quarter results before the start of trading on Wednesday.