Investors await earnings reports
Stocks edged higher Tuesday as investors refrained from major moves ahead of first-quarter earnings reports that began with Alcoa Inc.’s results after the closing bell. A modest increase in the Dow Jones industrials marked the eighth-straight win for the blue chip index, its first such streak since 2003.
Aluminum producer Alcoa reported a better-than-expected first-quarter profit, pleasing investors who bid the company’s stock up in after-hours trading. Wall Street was looking for results from the Dow component to not only gauge the pace of earnings for the quarter but as a proxy for the health of the overall economy.
Tuesday was the second day in a row that stocks showed little overall movement as investors awaited news of how companies fared during the first quarter, and also their expectations for the coming quarters. In the fourth quarter, Standard & Poor’s 500 companies snapped an 18-quarter streak of double-digit profit gains, and Wall Street expects profit growth to remain in the single digits for the first three months of the year.
“A lot of people are going to be watching earnings very closely and not just the numbers, but the guidance that they give going forward,” said J. Michael Barron, chief executive of Knott Capital. “I think that will be crucial.”
With no major economic data scheduled, investors looked to speeches by Federal Reserve officials to get a better idea of where the central bank stands on inflation and interest rates. A stronger-than-expected jobs report Friday dashed some investors’ hopes that the central bank will soon lower interest rates.
The Dow rose 4.71, or 0.04 percent, to 12,573.85.
Broader stock indicators edged higher. The S&P 500 rose 3.78, or 0.26 percent, to 1,448.39, and the Nasdaq composite index advanced 8.43, or 0.34 percent, to 2,477.61.
Bonds continued their recovery, with the yield on the benchmark 10-year Treasury note falling to 4.72 percent from 4.75 percent late Monday. Bonds fell sharply Friday after release of the government’s jobs report. Gold prices rose, while the dollar was mixed against other major currencies.
Oil prices rose after selling off Monday following doubts about Iran’s comments about its uranium enrichment achievements. A barrel of light, sweet crude for delivery on the New York Mercantile Exchange rose 38 cents to settle at $61.89.
Investors were also awaiting minutes due today from the Fed’s most recent meeting at which it left short-term interest rates unchanged for the sixth straight time. The Fed has been standing pat on interest rates following a string of 17 straight increases that began in 2004.
Advancing issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange, where volume came to 1.33 billion shares compared with 1.26 billion traded Monday.
The Russell 2000 index of smaller companies rose 2.87, or 0.35 percent, to 814.51.
Overseas, Japan’s Nikkei stock average closed down 0.45 percent. At the close, Britain’s FTSE 100 rose 0.32 percent, Germany’s DAX index rose 0.94 percent, and France’s CAC-40 rose 0.43 percent.