Stocks Jumbled Ahead of Company Earnings

NEW YORK ( TheStreet) -- Major U.S. stock averages closed mixed Tuesday as investors braced for bank earnings and processed a slew of economic reports.

Meanwhile, President Barack Obama, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke emphasized the necessity of raising the debt ceiling soon, an issue of concern for investors.

The Dow Jones Industrial Average rose 28 points, or 0.2%, to 13,535.

Breadth was slightly positive, with winners outnumbering losers 17 to 13. The biggest percentage blue-chip laggards included Hewlett-Packard ( HPQ), AT&T ( T), Merck ( MRK) and Verizon ( VZ).

JPMorgan Chase ( JPM) shares moved higher after initially dipping at the open. The firm was ordered to take steps to correct poor risk management in connection with the multi-billion dollar trading loss it suffered last year.

Top gainers included Microsoft ( MSFT), Caterpillar ( CAT) and JPMorgan.

The S&P 500 was up 2 points, or 0.1%, to 1,472.

The Nasdaq slipped 7 points, or 0.2%, to 3,111 as Apple ( AAPL) shares slid 3.2% to trade below $500.

The broader sectors were mixed. Sector advancers included capital goods, consumer non-cyclicals, consumer cyclicals and transportation. Decliners included healthcare and technology.

Volumes totaled 3.12 billion shares traded on the Big Board and 1.85 tillion on the Nasdaq. Advancers were edging decliners by a 1.3-to-1 ratio on the New York Stock Exchange, and a 1.2-to-1 ratio on the Nasdaq.

Ted Weisberg, president of Seaport Securities, said he thinks the stock market is suggesting the economy is doing "a little better than it might be." While the economic numbers this week are important, the focus, he stressed, remains on fourth-quarter earnings.

"The problem with the entire market and fourth-quarter earnings is that with the market trading at current levels, which for many of the popular averages are at or making new recovery highs, there leaves little room for disappointment," said Weisberg. "So when stocks get priced to perfection in a general sense, companies better get it right because if they don't, then the stocks are going to suffer. It doesn't mean we're going to throw the baby out with the bath water, but what it does mean is that there is little room for error."

He said companies need to "get it right" in all three areas of the trifecta of bottom-line growth, top-line growth and guidance.

Stephen Guilfoyle, chief economist at sarge986.com, said that besides looking at the economic data and a number of speeches from Fed officials on Tuesday, traders were "loading up" for the Goldman Sachs ( GS) and JPMorgan Chase reports on Wednesday.

Meanwhile, Keith Bliss, director of sales and marketing at Cuttone, said that any kind of upside surprise at the end of the month from basic material companies U.S. Steel ( X), DuPont ( DD) and Allegheny Technologies ( ATI), which guided down substantially following their third-quarter earnings, and the financial companies this week could potentially drive the S&P up to 1,500.

Mark Newton, chief technical analyst at Greywolf, said that while investors are looking more at earnings right now, the ramp-up of the debt ceiling debate that is just a few weeks away is going to have a big impact on sentiment and how people view the market.

"In my opinion it's all about sentiment and when it gets too frothy at one end and everybody's at one side of the boat, typically we reverse," said Newton. "And so right now between earnings and the debt ceiling debate those are two things that should serve as a driver for sentiment at least in the short-run."

Boston Fed President Eric Rosengren and Minneapolis Fed President Narayana Kocherlakota both gave dovish remarks during their talks Tuesday morning. Philadelphia Fed President Charles Plosser was also scheduled to speak.

Rosengren showed continued support for monetary accommodation in fulfilling the Fed's dual mandate on inflation and employment, while Kocherlakota said that the central bank should provide more monetary accommodation.

The Census Bureau said Tuesday that retail sales rose 0.5% in December after increasing by an upwardly revised 0.4% in November. Economists were expecting a rise of 0.2% in December.

Excluding the auto component, retail sales increased 0.3%, after falling by a downwardly revised 0.1%. Economists were expecting an uptick of 0.2%.

The Bureau of Labor Statistics reported that producer prices fell 0.2% in December after being down 0.8% in November. The core PPI, which excludes food and energy, ticked up 0.1% in December, the same as November. The average estimate was for a 0.1% decline in the headline number and a rise of 0.1% for the core read.

The general business conditions index from the New York Federal Reserve's Empire State Manufacturing Survey was little changed at negative 7.8 for January, compared with December's negative 8.10. A flat read was expected.

The Census Bureau also said that total business inventories increased 0.3% in November, as expected, after rising by a downwardly revised 0.3% in October.

Gold for February delivery surged $14.50 to settle at $1,683.90 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil futures fell 86 cents to close at $93.28 a barrel.

The benchmark 10-year Treasury rose 6/32 to dilute the yield to 1.831%. The dollar was up 0.29%, according to the U.S. dollar index.

Dell ( DELL), the No. 3 PC maker but once the world's largest, is in buyout talks with private-equity firms, according to Bloomberg, which cited two people with knowledge of the matter.

Shares added 7.2%.

Homebuilder Lennar ( LEN) posted fourth-quarter earnings of 56 cents a share on revenue of $1.35 billion, exceeding the average analyst estimate of 44 cents a share on revenue of $1.31 billion as the housing industry continues to recover.

Shares dipped 0.83% after trading higher in premarket trading.

Facebook ( FB) held a major press event at its headquarters Tuesday and announced a new graph search function that would allow users to more easily find shared content on its Web site.

Shares lost 2.7% on Tuesday.

Lululemon Athletica ( LULU) raised its fiscal fourth-quarter earnings guidance but said revenue growth would slow.

Shares tumbled 3.9%.

RadioShack ( RSH) said Monday that it was ending an agreement with Target ( TGT) to run mobile phone centers in its stores.

RadioShack said it has been renegotiating the terms of the deal with Target since October to make it profitable for both companies, but an agreement couldn't be reached and it will end the contract in April.

RadioShack shares were off 4.8%, while Target increased 1.2%.

Express ( EXPR) shares soared 23.8% after the specialty apparel and accessory retailer hiked its fourth-quarter profit outlook amid better-than-expected holiday sales.

Gordmans Stores ( GMAN) shares plunged 16.6% after the apparel and home fashions retailer on Monday cut its fourth-quarter earnings and revenue outlook as same-stores sales fell by 4.6% amid weakness in its seasonal businesses.

Globecomm Systems ( GCOM) shares gained 5.2% after the satellite-based communications solutions provider said it has retained Needham & Co. to explore strategic alternatives to enhance shareholder value.

Boston Scientific ( BSX ) shares jumped 3% after the stock was upgraded to outperform from neutral at Credit Suisse.

-- Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse.