NEW YORK ( TheStreet) -- Activity in the U.S. housing market hit a one-year high, bolstering U.S. stocks and outweighing some negative economic data in Europe and a trend of third-quarter earnings shortfalls among Dow Jones Industrial Average giants.
U.S. stocks added to early gains after data from the National Association of Realtors showed that existing home sales rose 2.4% in September, reaching a one-year high. Existing home sales for the month were 5.17 million, beating consensus estimates of 5.10 million, according to Bloomberg data.
The S&P 500 was rising 1.44% and the Dow was rising 0.93%. Nasdaq gained 1.76%.
Must Read: Warren Buffett's Top 10 Dividend StocksStrong home sales figures in the U.S. outweighed weak employment figures from the European Union. The EU reported on Tuesday its unemployment rate rose to 8.2% in September, a higher-than-expected rise. Economists had forecast unemployment to reach 7.9%, according to estimates compiled by Bloomberg. A 1.5% year-over-year rise in consumer spending and industrial production in Europe, however, pointed to stronger-than-expected economic activity in the region. Calendar third quarter earnings continue to show strong growth at high-end consumer brands like Apple (AAPL) . However, earnings also show a dramatically changing business outlook at Dow bellwethers like Coca-Cola (KO) and McDonald’s (MCD) , which both fell well short of earnings estimates on Tuesday. Those misses followed IBM’s (IBM) reduced outlook on Monday, which pushed shares to multi-year lows. Weak earnings among Dow components have weighed on the index in recent trading sessions. The Dow has lost 0.22% over the past five trading days, while the S&P 500 has gained 2.69% and the Nasdaq has gained 3.75%. Coca-Cola on Tuesday posted third-quarter earnings that missed estimates and said it would fall short of its 2014 profit targets. Atlanta-based Coca-Cola reported third-quarter earnings of 48 cents a share, missing analyst consensus of 53 cents, on revenue of $11.97 billion; analysts expected sales of $12.1 billion, according to Bloomberg data. The company will now focus on finding $3 billion in annual cost savings by 2019 through operating changes, CEO Muhtar Kent said. Coca-Cola also abandoned its 2014 profit targets, and adjusted its sales growth targets to the mid-single-digits. The company did maintain its long-term high single-digit earnings growth targets. Shares in Coca-Cola were tumbling more than 5% in Tuesday trading at $40.74. McDonald's, meanwhile, reported a 30% plunge in profit as U.S.-based sales fell for a fourth consecutive quarter. Illinois-based McDonald's reported revenue of $6.99 billion in the third quarter, missing analyst estimates as U.S. same-store sales fell over 3%. The nation's largest restaurant chain, however, reported $1.51 a share in adjusted EPS, beating estimates. Analysts had forecast McDonald's to earn $1.36 in adjusted EPS on revenue of $7.19 billion, according to Bloomberg data. Shares in McDonald's were falling less than 1% at $91.20 in early trading. Apple, the most profitable company in America over the past 12 months, posted earnings late on Monday that are illustrative of the divergence between the Dow and S&P 500 this earnings season. The iPhone maker reported its strongest sales growth in nearly two years on Monday evening, after launching its iPhone 6 in mid-September. The company reported better-than-forecast fiscal fourth-quarter earnings of $1.42 a share on revenue of $42.1 billion, beating forecasts of $1.30 a share in EPS on $39.9 billion in revenue, according to data compiled by Bloomberg. Apple's earnings were bolstered by stronger-than-expected iPhone sales of 39.3 million for the fourth quarter and 12.3 million iPad sales. Shares in the company were rising more 2% ion Tuesday to $102.17. In other earnings news, Verizon Communications' (VZ) $31.6 billion in sales exceeded third-quarter estimates but its 89 cents in earnings per share fell slightly short of consensus. The nation's largest wireless carrier said it added 1.53 million subscribers in the quarter and plans $17 billion of capital expenditures in fiscal 2014, indicating a bullish outlook at the company. Verizon shares were rising less than 1% in afternoon trading to $48.50. United Technologies (UTX) reported better-than-forecast third-quarter earnings of $2.04 a share, beating consensus of $1.81 a share. Shares in United Technologies were rising over 1% at $102.97. Stock markets were buoyed in the premarket by Chinese gross domestic product data. GDP expanded by 7.3% in the three months ended in September, according to the Chinese statistics bureau. While the GDP data exceeded the median forecast of 7.2% growth, according to estimates compiled by Bloomberg, it nonetheless represented the slowest quarter for growth in China since early 2009. -- Written by Antoine Gara in New York Follow @AntoineGara
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