Stocks gain on quarterly results
- Article by: KATE GIBSON
- January 22, 2013 - 7:17 PM
NEW YORK - U.S. stocks gained Tuesday, with the S&P 500 index posting its longest winning streak in nearly six weeks, as Wall Street embraced quarterly results from corporations including insurer and Dow component Travelers Cos. Inc.
"We're right in the middle of the thick of earnings season, and materials actually came out and beat expectations, which could mean the economy is stronger than we realized," said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research.
The Dow Jones industrial average advanced 62.51 points, or 0.5 percent, to 13,712.13, with Travelers among the components rising after reporting profit that easily beat Wall Street's expectations as it charged more for its coverage but still retained customers.
The S&P 500 index rose 6.58 points, or 0.4 percent, to 1,492.56.
The S&P 500's rise, which has it up 4.7 percent since the start of the year, puts it well above the old resistance level of 1,465, which is now viewed as a technical support level, according to Frederick, who said he does not see any resistance until 1,516.
"Earnings aren't growing very much overall, but expectations are so low that I don't think earnings are going to hurt the market much," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co.
"The glaring potential problem is sentiment; it's hard to find anyone who believes the market is not going up now, which is always some cause for concern, at least in the short term," Bittles added.
Wall Street's optimism could hit a peak in short order and prompt a market consolidation or market correction, according to Bittles, who lists as among the possibilities a compromise to raise the U.S. debt ceiling, the S&P 500 crossing 1,500 or an upside surprise in results from Apple Inc.
House Republicans have set a vote for Wednesday on raising the U.S. debt limit through the middle of May, in a move the White House has welcomed as a means of scaling back brinkmanship over the budget debate.
Apple reports fiscal first-quarter results on Wednesday, with the world's most valuable company facing increased production costs and competition from Samsung Electronics. Apple shares rose 1 percent on Tuesday.
The Nasdaq composite index rose 8.47 points, or 0.3 percent, to 3,143.18.
© 2013 Star Tribune