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Stocks end higher, led by materials, energy

After Standard & Poor's downgraded its outlook on US debt Monday and sent stocks downward, stocks rose on Tuesday, with the Dow gaining about 65 points

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In earnings, Goldman Sachs soundly beat expectations, with both sales and earnings in the first quarter coming in strong, but the bank's shares sank after the results got a mixed review on Wall Street.

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Dick Bove at Rochdale Securities downgraded Goldman to "neutral" from "buy" saying the firm's asset management business was weak, and its investment banking business wasn't keeping up with its peers, among other concerns.

Several regional banks also released earnings Tuesday. Zions Bancorp soared to the top of the S&P 500 after delivering surprisingly strong results, and receiving boosts in its rating and price target from several brokerages.

Shares of State Street and Regions Financial, meanwhile, rose after beating estimates in the first quarter.

But Bank of New York Mellon slumped despite reporting a 4 percent rise in first quarter profit as assets under custody and fee revenue increased, and Comerica fell despite reporting a 98 percent jump in first quarter earnings, and a 72 percent drop in its loan-loss provisions. US Bancorp also slipped despite good results.

On the tech front, Texas Instruments fell Tuesday after reportings earnings which came in below analysts’ expectations after the bell on Monday. About $30 million in costs related to the earthquake in Japan last month took 2 cents out of the company's earnings.

"Japan has a very important role to play in the technology sector," White of LPL Financial said. The fact Japan is not recovery as quickly from the multiple disasters that occured last month is putting a crimp in those stocks.

IBM and Intel were mixed ahead of reporting earnings after the market closes today.

Meanwhile, Research in Motion's Playbook, the Blackberry maker's response to Apple’s iPad, went on sale Tuesday.

Apple is in the spotlight in a separate development as well after Reuters reported the group sued rival Samsung Electronics, claiming that Samsung's Galaxy line of mobile phones and tablet "slavishly" copies the iPhone and iPad.

Steel stocks were among the strongest performers in the materials sector in the wake of a 63 percent jump in first quarter profits at Steel Dynamics, which was better than expected. US Steel, AK Steel, ArcelorMittal and Nucor all rose sharply.

Nasdaq OMX and Intercontinental Exchange are pursuing their proposed takeover of NYSE Euronext by lining up commitments to fund the takeover, and offering to pay a reverse breakup fee. The NYSE board has rejected the Nasdaq/ICE's $11.3 billion bid in favor of a bid by Deutsche Boerse of Germany for $10.2 billion.

Meanwhile, oil prices ended mixed. London Brent crude fell 0.23 percent to $121.33 a barrel, while U.S. light crude rose 0.96 percent to $108.15.

Gold futures hit a intraday high of $1,500 an ounce before closing up 0.15 percent at $1,494.50.

Gold miners and producers gained, including Agnico-Eagle Mines, Allied Nevada Gold, and Iamgold. Freeport McMoran Copper & Gold, which reports earnings Wednesday before the bell, also rose.

The dollar fell against a basket of currencies as the euro got a boost from economic news.

In economic news, housing starts in March rose 7.2 percent to a seasonally adjusted annual rate of 549,000 units, while building permits for the month rose 11.2 percent, the Commerce Department said Tuesday.

The news boosted stocks of homebuilders including PulteGroup, which led the S&P 500, as well as Ryland Group Hovnanian and KB Home.

In Europe, Swiss drugmaker Novartis reported first-quarter earnings above analyst forecasts. The stock was 3.3 percent higher in mid-morning trading. European shares closed higher, helped by positive earnings.