NEW YORK -- Wall Street, stymied once again by worries about interest rates, gave up a healthy early advance and closed mixed Tuesday. Investors ended up disregarding another encouraging economic report and better-than-expected earnings from companies including Lockheed Martin Corp. and R.J. Reynolds Tobacco Holdings Inc.
Analysts said the market can't decide whether to buy on the improving business climate or sell on the increasing likelihood of higher rates.
"We're seeing robust earnings and, in a lot of cases, positive surprises in earnings," said Peter Wall, chief investment officer at Chase Personal Financial Services. "But it still seems to be a dilemma for the market to focus on earnings or interest rates."
The Dow Jones industrial average closed up 33.43, or 0.3 percent, at 10,478.16, according to preliminary calculations, after gaining more than 90 points earlier in the session.
Broader stock indicators were mixed. The Standard & Poor's 500 index was up 2.95, or 0.3 percent, at 1,138.48, and the Nasdaq composite index was down 4.24, or 0.2 percent, at 2,032.53.
The erratic sessopm followed two weeks of declines over interest rates. With the economy improving, many on Wall Street are nervous that the Federal Reserve will begin raising rates sooner rather than later. Higher interest rates would make it more costly for businesses to borrow money - leading some investors to worry that business expansion will slow.
There were more indications Tuesday that the economic rebound continues. The Conference Board's Consumer Confidence Index rose to 92.9 from a revised 88.5 in March. The reading was better than the 88.5 that analysts had forecast.
Also, the National Association of Realtors reported that existing home sales rose 5.7 percent in March to a seasonally adjusted annual rate of 6.48 million - second only to the all-time monthly high rate of 6.68 million registered in September 2003 and ahead of market expectations.
Analysts did see some bright sides to the difficult session. The economic reports didn't trigger any immediate selling, unlike other upbeat data over the past two weeks. Some analysts said the lack of a sharp selloff suggested the market's mood is improving although it is very hard for stocks to hold their gains.
"We've had a few trading sessions for profit-takers to take profits off the tables, and we've alleviated to some extent some of the valuation concerns we had a month ago because earnings have come in very strong in the first quarter," said Kevin Caron, a market strategist with Ryan, Beck & Co., LLC. "When you combine that with the consumer confidence numbers, this suggests to me this is a strong market."
That's not too say, though, that investors have completely moved past interest rate jitters.
"I expect that after the market has run up and there's a good economic data release, investors will ... pull back," Wall said. "Longer-term, though, I expect the market will realize that interest rates going up is not going to have as severe an impact on the economy going forward."
Lockheed Martin was up 40 cents, or 0.9 percent, at $46.90 after the company's quarterly results beat expectations.
Better-than-expected results helped R.J. Reynolds, the No. 2 cigarette maker and manufacturer of the Camel, Winston and Doral brands, surge $2.28, or 3.8 percent, to $61.46.
But investors were selective - Verizon Communications Inc. fell 32 cents, or 0.8 percent, to $37.42after the company turned in first-quarter numbers ahead of many analysts' estimates, but recorded a sharp drop in earnings.
U.S. Steel shares tumbled $2.37, or 6.7 percent, at $33.13 after the company's chief executive stepped down, overshadowing an encouraging earnings report.
Advancing issues outnumbered decliners nearly 5 to 4 on the New York Stock Exchange, where volume was brisk.
The Russell 2000 index of smaller companies was up 0.88, or 0.2 percent, at 590.33.
Overseas, Japan's Nikkei stock average slipped 1.01 percent. In Europe, Britain's FTSE 100 finished up 0.1 percent, Germany's DAX index advanced 0.2 percent, and France's CAC-40 closed down 0.1 percent.
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