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NEW YORK (Reuters) – Stocks were little changed on Tuesday, with the SP 500 holding near multi-year highs ahead of President Barack Obama’s State of the Union address.
The economy will be a major topic of Obama’s speech before a joint session of Congress set for 9 p.m. (0200 GMT Wednesday). Investors will listen for any clues on a deal with Republicans to avert automatic spending cuts due to take effect March 1.
The SP 500 has risen in the past six weeks and is up 6.5 percent so far this year. But gains have been harder to come by since the benchmark SP index hit a five-year high on February 1. The market has to consolidate strong gains at the year’s start while investors search for reasons to drive stocks higher.
“The market itself at this point has got to digest this six-plus percentage point move … we are due for that pause,” said Drew Nordlicht, managing director at HighTower Advisors in San Diego.
Investors are “looking for more data at this point going forward to support the thesis that corporate profits will continue to grow and the economy has turned the corner.”
The White House has signaled Obama in his speech will urge U.S. investment in infrastructure, manufacturing, clean energy and education. He is also expected to call for comprehensive trade talks with the European Union.
With earnings season moving to its latter stages, of the 353 companies in the SP 500 that have reported earnings, 70.3 percent have exceeded analysts’ expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters according to Thomson Reuters data through Tuesday morning.
Fourth-quarter earnings for SP 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
The Dow Jones industrial average .DJI gained 27.65 points, or 0.20 percent, to 13,998.89. The Standard Poor’s 500 Index .SPX added 1.03 points, or 0.07 percent, to 1,518.04. The Nasdaq Composite Index .IXIC dipped 1.60 points, or 0.05 percent, to 3,190.41.
Coca-Cola Co (KO.N) shares fell 1.9 percent to $37.88 and were the biggest drag on the Dow after the world’s largest soft drink maker reported quarterly revenue slightly below analysts’ estimates, hurt by a weaker-than-expected performance in Europe.
Housing shares climbed, led by a 12.9 percent jump in Masco Corp (MAS.N) to $20.09 after the home improvement product maker posted fourth-quarter earnings and said it expects new home construction to show strong growth in 2013. The PHLX housing sector index .HGX gained 2.7 percent.
Avon Products (AVP.N) shares surged 16.7 percent to $20.16 after the beauty products company reported a better-than-expected quarterly profit.
Goodyear Tire Rubber (GT.O) shares lost 3.1 percent to $13.48 after it posted a stronger-than-expected quarterly profit but cut its 2013 forecast due to weakness in the European automotive market.
Michael Kors Holdings (KORS.N) shares jumped 10.9 percent to $63.24 after the fashion company handily beat Wall Street’s estimates and raised its full-year outlook.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)