By Corrie Driebusch
U.S. stocks gained on Tuesday, putting them on track to push the
Dow industrials further into positive territory for the year.
The Dow Jones Industrial Average rose 76 points, or 0.4%, to
17957. The S&P 500 added six points, or 0.3%, to 2087 and the
Nasdaq Composite gained 24 points, or 0.5%, to 4942.
Investors and traders say market attention has turned to
corporate results. First-quarter earnings are expected to decline
due to a stronger dollar and its effect on profits at large
multinational companies, and weaker commodity prices and their
impact on energy companies. In all, analysts expect earnings at
S&P 500 companies to fall 4.9% from a year earlier, according
to FactSet.
"The next market catalyst is going to be how earnings do against
expectations," said Brad McMillan, chief investment officer for
Commonwealth Financial Network, which manages about $97
billion.
In the past, a big earnings revision downward, such as the one
the market experienced in recent months, has been a harbinger of a
recession, he said. However, he added that he doesn't believe that
is the case this time, because the revision has been based on the
price of oil and the strength of the dollar rather than on slowing
domestic demand or economic weakness.
"Still, we have an enormous earnings headwind ahead of us, and
the market is wrestling with this," he said.
Earnings season unofficially begins this week, when Alcoa Inc.
reports results after the stock market closes Wednesday.
In recent sessions, stock-trading volumes have been fairly
muted, with fewer shares changing hands than typical. Tuesday was
no exception, traders said.
"Everyone's a little confused, a little cautious," said Seth
Setrakian, co-head of global equities at First New York Securities.
"They'd rather miss the next leg up than be caught overexposed.
There's a lot of cash on the sidelines."
On Monday, U.S. stocks rose on lower-than-average trading
volumes as investors shrugged off the disappointing employment
report for March. The Dow gained 0.7% to 17880.85, pushing higher
for 2015. The S&P added 0.7% to 2080.62.
Friday's weak employment report, which showed the economy added
126,000 jobs last month, has heightened the emphasis on other labor
and wage data, said Quincy Krosby, market strategist at Prudential
Financial.
"There is a premium on data with regard to employment, wages,
and anything that suggests that Friday's number was an aberration,"
she said.
That includes Tuesday's job openings and labor turnover survey,
which is closely watched by the Federal Reserve. According to the
Labor Department survey, the number of job openings in the U.S.
climbed to the highest level in 14 years, surpassing five million
for the first time since January 2001. But the number of Americans
actually hired to fill jobs declined, as did the number of people
who voluntarily quit.
Action in the stock market has been choppy this year as
investors prepare for an eventual increase in interest rates.
Comments from Federal Reserve Chairwoman Janet Yellen have
underscored that even when the Fed begins to move on rates, it will
do so gradually. The expected slow pace of rate increases will make
stocks appear a more attractive investment than bonds for a while
longer, investors say. The Dow has added 0.3% this year and is up
10% over the last 12 months, through Monday's close.
On Tuesday, European stocks advanced in their first day of trade
after the Easter holiday weekend. France's CAC 40 gained 1.5% and
Germany's DAX rose 1.3%. Investors were cheered by upbeat data on
private-sector activity, which expanded at the fastest pace in 11
months, even after slight downward revisions to initial
estimates.
In commodity markets, crude-oil futures gained 3.1% to $53.75 a
barrel. Gold futures lost 0.6% to $1211.10 an ounce.
The yield on the 10-year Treasury note slipped slightly to
1.909% from 1.913% on Monday. Yields rise as prices fall.
In corporate news, FedEx Corp. said it would buy Dutch
parcel-delivery firm TNT Express NV for about EUR4.4 billion ($4.8
billion) to expand in Europe. FedEx shares rose 2.7%.
Informatica Corp. agreed to be taken private by Permira Advisers
LLC and the Canada Pension Plan Investment Board in a deal valued
at $5.3 billion, the largest U.S. leveraged buyout so far this
year. Shares rose 4.2%.
Energy logistics company Tesoro Logistics LP, a master limited
partnership created by refinery operator Tesoro Corp., has agreed
to buy the remaining stake of QEP Midstream Partners LP in an
exchange of common units. Shares of QEP Midstream jumped 5.4%.
Saumya Vaishampayan contributed to this article.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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