Stocks Lifted by Earnings, Consumer Confidence

NEW YORK ( TheStreet) -- Stocks had a strong finish to the day after all three major indices hit 52-week highs on a better-than-expected read for April consumer confidence and encouraging earnings reports.

The Dow Jones Industrial Average finished up by 115 points, or 0.9%, at 12,595. The S&P 500 was higher by 12 points, or 0.9%, at 1347, and the Nasdaq was ahead by 22 points, or 0.8%, at 2848. The indicies all hit 52-week highs Tuesday.

Consumer confidence rose to a better-than-expected level of 65.4 in April after a March reading of 63.8, the Conference Board said. According to Briefing.com, economists had been forecasting an April reading of 64.4.

"The gain over the last month, while not substantial, is nonetheless encouraging given the recent spike in food and fuel prices," said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors in a recent note. "The survey suggested that inflation expectations actually eased a bit, while consumers viewed current broad economic conditions more favorably for the seventh consecutive month."

Baird added that inflationary pressures pose the biggest near-term risk to consumer confidence and spending since higher prices could force consumers to make budget cuts, thereby slowing the pace of economic recovery.

Shares of airline carriers and railroads ended with some of the strongest gains, with SkyWest ( SKYW ) up 2.9% to $16.26 and RailAmerica ( RA) 2.9% higher at $17.13.

On the Dow, Cisco Systems ( CSCO), Caterpillar ( CAT), Intel ( INTC), Microsoft ( MSFT), Merck ( MRK) and United Technologies ( UTX) were traded at the top. Stocks such as W&T Offshore ( WTI), Kindred Healthcare ( KND), Carpenter Technology ( CRS) ended ahead by 18%, 18% and 10%, respectively, as they hit 52-week highs.

Coca-Cola ( KO), which missed expectations with adjusted earnings of 86 cents a share and sales of $10.51 billion, was the Dow's biggest laggard. The stock fell 1.2% at $66.93.

Basic materials stocks showed some of the weakest performance of the session. Shares of United States Steel ( X) lost 4.1% at $49.72 after the company posted a wider-than-expected loss in the first quarter .

Shares of AK Steel ( AKS), however, rose 6.4% to $16.96 after the steel producer posted a surprise profit of 8 cents a share .

Dow component 3M ( MMM) surpassed Wall Street's expectations with earnings of $1.49 a share on sales of $7.3 billion. The stock gained 1.9% to $95.94.

Shares of UPS ( UPS) added 0.9% to $74.30 after the package delivery company beat analysts' profit estimates by 3 cents with earnings of 88 cents a share. Revenue of $12.58 billion, however, fell short of expectations for sales of $12.7 billion.

Shares of Ford ( F) gained 0.8% to $15.66 after the automaker easily exceeded analysts' estimates for a first-quarter profit of 50 cents a share with adjusted earnings of 62 cents a share. Sales climbed to $33.1 billion, beating expectations for sales of $29.7 billion.

UBS ( UBS) jumped 5.7% to $19.74 after the Swiss bank topped expectations with first-quarter net earnings of 1.81 billion Swiss francs ($2.05 billion).

Late Monday, Netflix ( NFLX) reported better-than-expected first-quarter results but forecast second-quarter earnings of between 93 cents and $1.15 a share, which was lower than the profit of $1.19 that analysts had been projecting. The stock lost 9% at $228.91.

Amazon.com ( AMZN) is scheduled to report quarterly earnings after Tuesday's closing bell. Analysts are projecting earnings 61 cents a share. Shares fell 1.7% at $182.30.

Of the 907 million shares that traded on the New York Stock Exchange, 70% traded higher while 30% declined. Two billion shares changed hands on the Nasdaq.

The Federal Reserve's policy-setting committee is coming together for a two-day meeting that will culminate in the release of its statement on monetary policy at 12:30 p.m. EDT on Wednesday. Fed Chairman Ben Bernanke will also conduct a press briefing to discuss the statement and monetary policy on Wednesday. The market largely expects the Fed to end its asset-purchase program in June, but rising food and energy prices have caused increased uncertainty regarding the Fed's plan to keep inflation in check.

Home prices fell 3.33% in February after dropping 3.1% in January, according to the Case-Shiller 20-city index. The decline was slightly bigger than the 3.2% slump that analysts had projected, according to Briefing.com.

Hong Kong's Hang Seng shed 0.5% and Japan's Nikkei lost 1.2%. London's FTSE gained 0.9% and the DAX in Frankfurt added 0.8%.

In commodity markets, the June crude oil contract shed a penny to settle at $112.28 a barrel. The June gold contract ended $5.60 lower at $1,503.50 an ounce .

The benchmark 10-year Treasury rose 14/32, diluting the yield to 3.309%. The dollar weakened against a basket of currencies with the dollar index down by 0.2%.

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--Written by Melinda Peer and Andrea Tse in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.