By Sara Sjolin, MarketWatch , Ryan Vlastelica

Investors keep eye on bond yields; Alphabet sinks after results

U.S. stocks rose on Tuesday, with the Dow poised to snap a four-day skid as strong corporate earnings supported sentiment, although rising bond yields caused investors to assess borrowing costs for U.S. corporations.

What are markets doing?

The Dow Jones Industrial Average rose 90 points, or 0.4%, to 24,540. The S&P 500 was up 11 points to 2,681, a gain of 0.4%. The Nasdaq Composite Index was up 30 points, or 0.4%, to 7,159.

The day's gains were broad, with nine of the 11 primary S&P 500 sectors higher on the day. Among the notable gainers were technology shares, which rose 0.5%, and consumer-discretionary stocks, up 0.5%.

What is driving the market?

Stocks have been whipped around by rising U.S. bond yields recently, as the 10-year rate touched the psychologically important 3% handle (http://www.marketwatch.com/story/10-year-us-government-bond-yield-touches-30-level-2018-04-24). Higher bond yields tend to weigh on stocks because they push up borrowing costs for corporate. Yields and debt prices move in opposite directions.

Earnings were also a major focus on Tuesday, with a deluge of high profile companies reporting results before the open. The season has so far been strong, and more than 80% of the S&P 500 companies reporting so far have beaten profit forecasts. That compares with the fourth quarter of 2017, when around 73% of S&P companies topped estimates, according to FactSet data.

What are strategists saying?

"Crossing 3% on the 10-year is something that will certainly raise concerns, but at this stage of the cycle, higher yields aren't antithetical to rising stock prices. For the time being I think we're fine, but we're certainly keeping an eye on the yield curve, especially if the Fed becomes more aggressive," said Bruce McCain, chief investment strategist at Key Private Bank. "Ultimately earnings remain the primary driver, along with the fact that the economy is still in pretty good shape.

Hussein Sayed, chief market strategist at FXTM, said that "the 3% by itself is just a psychological level and not a significant threat, but if a break above leads to further selling in Treasury bonds, that's going to be a serious warning signal for equity bulls. With a current world running on A.I and algorithms, a selloff may look ugly."

What stocks are in focus?

Earnings were in focus with six Dow components reporting results on Tuesday. While results were largely positive, stock prices generally saw tepid or negative reactions, a sign that even strong earnings haven't been enough to excite investors.

United Technologies Corp.(UTX) raised its guidance for the full year (http://www.marketwatch.com/story/united-tech-shares-jump-almost-3-premarket-after-earnings-top-estimates-2018-04-24) after releasing first-quarter earnings that blew past estimates. The stock rose 1.9%.

Coca-Cola Co.(KO) reported earnings that slightly beat expectations, but the stock fell 1.3%.

Caterpillar Inc.(CAT) surged 3.5% after the maker of construction and mining equipment reported first-quarter profit and sales (http://www.marketwatch.com/story/caterpillars-stock-surges-after-profit-and-sales-beat-raised-outlook-2018-04-24) that were well above expectations.

Shares of Alphabet Inc.(GOOGL) (GOOGL) sank 2.4% even after the Google parent late Monday reported earnings ahead of analyst estimates (http://www.marketwatch.com/story/alphabet-stock-rises-after-earnings-beat-2018-04-23).

Travelers Cos. Inc.(TRV) lost 3.7% before the open after its first-quarter earnings missed forecasts (http://www.marketwatch.com/story/travelers-stock-slips-on-earnings-miss-2018-04-24).

3M Co.(MMM) fell more than 5.3% on Tuesday as the company reported earnings in line with estimates, but said its full-year earnings would be lower than previously expected (http://www.marketwatch.com/story/3m-reports-in-line-earnings-but-guides-lower-for-the-year-2018-04-24).

Verizon Communications Inc.'s (VZ) stock rose 1.4% after the company announced better-than-expected results (http://www.marketwatch.com/story/verizon-stock-gains-after-revenue-earnings-beat-2018-04-24)for its March quarter.

Freeport-McMoRan Inc. (FCX) fell 4% after the company reported first-quarter earnings and revenue that missed expectations (http://www.marketwatch.com/story/freeport-mcmoran-earnings-fall-short-of-estimates-2018-04-24).

Eli Lilly & Co.(LLY) rose 1.1% after raising its 2018 profit guidance (http://www.marketwatch.com/story/eli-lilly-raises-2018-profit-view-after-quarterly-earnings-sales-beat-expectations-2018-04-24).

Read: Google made a lot more profit, and spent a LOT more money--here's why (http://www.marketwatch.com/story/google-made-a-lot-more-profit-and-spent-a-lot-more-moneyheres-why-2018-04-23)

Harley-Davidson Inc.(HOG) reported revenue and earnings that came in above analyst expectations (http://www.marketwatch.com/story/harley-davidson-expects-ramp-up-overseas-2018-04-24). Shares were up 0.1%.

PulteGroup Inc. (PHM) gained 4.5% after reporting strong first-quarter results.

Sanmina Corp.(SANM) rallied 22% after the electronics maker late Monday reported profit and sales above Wall Street estimates (http://www.marketwatch.com/story/sanmina-shares-skyrocket-15-after-company-beats-earnings-2018-04-23).

U.S.-listed shares of SAP AG(SAP.XE) (SAP.XE) climbed 4.5% after the German software giant raised its outlook for 2018 (http://www.marketwatch.com/story/sap-lifts-outlook-on-callidus-deal-strong-quarter-2018-04-24) to reflect the acquisition of Callidus Software Inc. and a strong first-quarter operating performance.

What economic data are in focus?

The S&P/Case-Shiller national index rose a seasonally adjusted 0.5% (http://www.marketwatch.com/story/home-prices-surge-to-a-near-four-year-high-case-shiller-shows-2018-04-24) and was up 6.3% compared with a year ago in February, hitting a four-year high.

U.S. consumer confidence index rose to 128.7 in April from 127, while new-home sales were at a seasonally adjusted annual rate (http://www.marketwatch.com/story/new-home-sales-roar-to-a-4-month-high-in-march-2018-04-24) of 694,000 in March, Commerce Department says.

See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

What are other markets doing?

Asian markets closed mostly higher, with Chinese stocks getting a lift from the government announcing deeper economic and market reforms (http://www.marketwatch.com/story/weaker-yen-boosts-nikkei-as-other-asian-markets-mixed-2018-04-23).

Stocks in Europe are also trading higher (http://www.marketwatch.com/story/european-stocks-hold-at-2-month-highs-as-energy-names-rally-2018-04-24), with the Stoxx Europe 600 index up 0.1%.

Oil prices continued to advance, with Brent breaking above $75 a barrel (http://www.marketwatch.com/story/brent-oil-breaks-above-75-on-fears-iran-sanctions-are-looming-2018-04-24) and trading around its highest level since November 2014.

Gold rose , while the ICE U.S. Dollar Index was flat.

(END) Dow Jones Newswires

April 24, 2018 10:11 ET (14:11 GMT)

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