By Dan Strumpf
U.S. stocks were mostly higher Tuesday, as oil prices rose and
investors eyed first-quarter earnings reports from J.P. Morgan
Chase & Co. and others.
The Dow Jones Industrial Average rose 81 points, or 0.5%, to
18058 in afternoon trade. The S&P 500 gained four points, or
0.2%, to 2096. The Nasdaq Composite Index slipped 16 points, or
0.3%, to 4972.
Energy stocks led the broader market, with Exxon Mobil Corp. and
Chevron Corp. posting the biggest gains among Dow components. Blue
chips were also buoyed by better results from J.P. Morgan, whose
shares rose 2.1%.
Trading activity remained subdued, however, as investors look to
additional quarterly reports in the weeks ahead. This week brings a
flurry of results from the financial sector. Broadly, money
managers are bracing for a weak earnings period, with companies
pinched by the stronger dollar and lower oil prices.
"We've really seen client activity in the U.S. drop off sharply
as clients wait for more clarity on earnings guidance and on Fed
policy," said Joe Spinelli, head of single stock trading for the
Americas at Deutsche Bank.
J.P. Morgan said its first-quarter profit rose 12%, boosted by
strong results in its trading business. Gains in the stock
contributed about six points to the Dow.
But Wells Fargo & Co. posted a rare quarterly earnings
decline as the bank faced pressure on its lending margins. Shares
fell 1%.
Johnson & Johnson said first-quarter profit fell 8.6%, and
it reduced its 2015 per-share earnings outlook amid increased
pressure from a strong U.S. dollar and weaker sales of hepatitis C
drug Olysio. But results exceeded expectations, and shares rose
0.1%.
S&P 500 companies are expected to post a 4.9% fall in
first-quarter earnings from a year ago, according to FactSet.
"There's a little bit of caution around some pockets of the
market," said Brian Fenske, head of sales trading at ITG. "In the
past few days, we've observed a general de-risking into earnings
season."
Energy stocks were lifted by a rally in the oil market.
Crude-oil futures gained 3% to $53.47 a barrel.
Stocks fell Monday in the second-slowest trading day of the
year. The Dow slipped 0.4% to 17977.04 and the S&P lost 0.5% to
2092.43. The Nasdaq fell 0.15% to 4988.25.
"You really can't ignore the impact of the significantly
stronger dollar on earnings, especially for multinationals," said
Monica DiCenso, U.S. head of equity strategy at J.P. Morgan Private
Bank. "And we haven't seen energy prices rebound. The impact on
[the] energy sector, as well as industrials, is going to be pretty
meaningful," she added.
Ms. DiCenso said she recently cut earnings expectations for the
year, now expecting 4% to 5% earnings growth for the S&P
500.
Among other individual stocks, shares of Fastenal Co. gained
3.1% after the nuts and bolts maker said earnings rose 14% in the
quarter ended in March.
Shares of Avon Products Inc. soared 13% after The Wall Street
Journal reported the company is exploring strategic alternatives,
including a possible sale.
In economic news, U.S. retail sales rose 0.9% in March to $441.4
billion, the Commerce Department said Tuesday. That was the biggest
monthly gain in a year, but was weaker than the 1.1% increase
expected by economists.
A gauge of U.S. business prices rose in March for the first time
since October. The Labor Department said Tuesday the producer-price
index gained 0.2% in March from February, in line with
expectations.
European stocks were mostly lower. France's CAC 40 fell 0.7% and
Germany's DAX declined 0.9%.
In commodity markets, gold futures declined 0.3% to $1195.70 an
ounce.
The yield on the 10-year Treasury note fell to 1.866% from
1.938% on Monday. Yields fall as prices rise.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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