Stocks Gain, Dow Reaches Fresh Record High
NEW YORK (TheStreet) -- U.S. stocks rose Tuesday, and the Dow Jones Industrial Average posted a new closing high on prospects companies will post first-quarter earnings that meet or beat expectations.
Stock were buoyed early in the day by data showing that China's inflation rate slowed more than forecast, making it more likely the world's second-largest economy won't raise interest rates.
Elsewhere, J.C. Penney (JCP) tumbled 12.2% to $13.93 a day after the struggling retailer fired Ron Johnson as CEO and hired former chief Mike Ullman. Shares were poised for their lowest close in 12 years.The S&P 500 rose 0.35% to close at 1,568.61. The Dow Jones Industrial Average added 0.41% to close at 14,673.46, a record closing high for the blue-chip index. The Nasdaq gained 0.48% to 3,237.86. "Expectations are low as reflected in the ... companies lowering forward earnings guidance, but I have said for the last four quarters, 'I think earnings will still surprise to the upside;' and, they have!," Jeffrey Saut, managing director at Raymond James Equity Research in St. Petersburg, Fla. said in a note about first quarter earnings season. "Certainly, the equity markets believe that because every time we are set up for a downside 'hit,' buyers show up." JPMorgan Chase (JPM) and Wells Fargo (WFC) report their earnings on Friday and are expected to set the tone for big money-center banks in the first-quarter earnings season. China's National Bureau of Statistics said Tuesday that annual consumer inflation in the country eased in March as food prices retreated from nine-month highs and producer price deflation worsened, stoking hopes that China still has room for easy monetary policy programs to stimulate the economic recovery. The lighter-than-expected inflation reading "helped reinforce easier rather than combative monetary policy heading forward," Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York, wrote in a note. Aluminum producer Alcoa (AA) kicked off earnings season Monday, coming up short on revenue but beating analysts' profit expectations. Alcoa finished lower by 0.12% to $8.38 Tuesday. Overall the first-quarter earnings among Standard & Poor's 500 companies are expected to increase 1.6% from last year, according to Thomson Reuters. The Census Bureau reported that wholesale inventories dropped 0.3% in February against a downwardly-revised 0.8% increase in January, leading to expectations of a lowering in first-quarter GDP estimates. Gold for June delivery surged $14.20 to $1,586.70 an ounce. May crude oil futures closed up 84 to $94.20 a barrel on the New York Mercantile Exchange. Mining company Cliffs Natural Resources ( CLF ) was a top S&P 500 gainer, popped 8.83% to $20.45 as it traced gains in the European stocks and commodity prices. First Solar ( FSLR ) jumped 45.5% to $39.35, making it one of the top S&P 500 advancers Tuesday. The solar energy company was hosting an analysts meeting Tuesday where it was expected to reveal details about its earnings outlook. The benchmark 10-year Treasury was slipping 2/32, boosting the yield to 1.754%. The dollar was falling 0.45% to $82.36 according to the U.S. dollar index. Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.
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