US stocks extend gains on Tuesday

Positive earnings from Merck and Sprint boosts stocks

U.S. stocks extended gains on Tuesday, 29 April 2014 as better-than-expected earnings from Merck and Sprint outweighed mildly disappointing economic reports. At midday, the major averages hover just below their best levels of the session, with the Nasdaq Composite trading a bit ahead of its peers. Consumer confidence dipped slightly in April, coming in below economists' forecasts. Separately, U.S. home-price growth slowed in February for the fourth consecutive month.

The Dow Jones Industrial Average jumped 108 points, or 0.7%, to 16,556.97. The Nasdaq Composite gained 35 points, or 0.9%, to 4,109.71. The S&P 500 was 11 points, or 0.6%, higher at 1,880.59.

 

Sprint shares rallied 9.7% after the company posted a smaller-than-expected loss in the first quarter. Merck rose 3% after it reported higher-than-expected earnings. The company is leading gainer on the Dow Industrials.

The Conference Board's Consumer Confidence Index fell to 82.3 in April from an upwardly revised 83.9 (from 82.3) in March. The consensus pegged the Consumer Confidence Index at 83.5. The Present Situation Index fell to 78.3 in April from 82.5 in March. The Expectations Index increased slightly, from 84.8 in March to 84.9 in April. The overall decline in confidence was a little unusual. Typically, confidence levels trend with employment conditions, equity prices, gasoline costs, and media reports. Extremely low layoff levels coupled with a generally rising stock market in April resulted in a large increase in the University of Michigan Consumer Sentiment Index. Those factors were expected, yet they failed to push the Consumer Confidence Index higher.

Separately, The Case-Shiller 20-city Home Price Index for February rose 13.2% while a 13.0% increase had been expected by the consensus. This follows the previous month's increase of 13.2%.

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