Investors' optimism helped markets close higher as stocks continued to gain momentum after an upbeat manufacturing report released by the Federal Reserve Bank of New York. The report helped energy and material share prices to go up despite weak Citigroup results and sliding prices of Apple AAPL. In the absence of any other major economic news which could sway the markets, the Dow posted a new 52-week intraday high. The S&P 500 and the tech driven Nasdaq also made gains and stopped just short of recording new 52-week highs.
The Dow Jones Industrial Average rose by 0.43% to 11,837.93. The S&P 500 added 0.14% to 1,295.02. The tech laden, Nasdaq Composite Index rose 0.38%, to 2,765.85. On the New York Stock Exchange, advancing stocks at 1,626 were clearly the gainers with the declining ones at 1,374. About 8.5 billion shares were traded on NYSE, keeping the volumes pretty fair.
On the economic front, a survey from the Federal Reserve Bank of New York has reported increased manufacturing activity in the month of January over the last month, with the banks general economic index increasing to 11.9. A healthy improvement in new orders index helped material and energy shares post gains.
Coming to international news, the euro has significantly strengthened after the much discussed and awaited meeting between the European Finance ministers and successful debt auctions conducted by the Spanish Government. The euro is currently trading at $1.3388 on reports of possible measures being taken by euro-zone officials to help combat Europe's debt crisis.
Midcaps were the highest gainers in Tuesday's trade. Majority of them outperformed the index but small and meagre gains from consumer staples and discretionary items restricted their advance. Shares of Titanium Metals TIE gained 4.7% and in the fertilizer space CF Industries Holdings CF moved up by 2.2%. Shares of Devon Energy Corp DVN gained 1.49% to close at $84.02. Banks were completely out of focus on Tuesday's trade after weak earnings from Citigroup C. Both shares of Morgan Stanley MS and Bank of America BAC were down by 0.8% and 1.6% respectively. In other news, shares of Convergys Corporation CVG increased by 6.61%, after Baird changed its rating from neutral to outperform, raising the price target to $17.
On to news about earnings and estimates, financial major Citigroup C posted results on Tuesday which came in much lower than Wall Street's expectations. Shares of the company fell 6.4% after the bank reported of a sharp decline in revenues arising from bond trading that lowered down the profits. Delta Airlines DAL also reported earnings that came in below expectations resulting in the stock plunging down by 8.22% to $11.70. IBM IBM reported their earnings after market hours and share prices gained 2.7% to $154.70 after the company posted better than anticipated profits.
Coming to individual counters, Boeing BA shares increased 3.4% after the company reported it had finalized the delivery schedule of its much awaited 787 Dreamliner jets. Reacting to news that Raymond James has raised its price target to $116, shares of Caterpillar Inc CAT rose 2.8%. Shares of Ariad Pharmaceuticals ARIA rocketed up 34% to $7.03 after its cancer treatment program successfully met the standards of a late trial. Sterling Bancshares shares increased 16% after the company was sold to Comerica Inc CMA in a deal valued at $1.01 billion. On the other hand, share prices of Zale Corp ZLE fell by 9.7% to $4.83 and was among the largest decliners on the day. Shares of Apple AAPL fell for two consecutive days after concerns arising from the health of CEO Steve Jobs. Share prices of the company fell 2% to $340.65.
APPLE INC (AAPL): Free Stock Analysis Report
ARIAD PHARMA (ARIA): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis Report
CF INDUS HLDGS (CF): Free Stock Analysis Report
COMERICA INC (CMA): Free Stock Analysis Report
CONVERGYS CORP (CVG): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
DEVON ENERGY (DVN): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
TITANIUM METALS (TIE): Free Stock Analysis Report
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