July 23, 2013 at 4:03 PM ET
Stocks finished flat in lackluster trading Tuesday, but the Dow posted a fresh closing high, as investors weighed a handful of upbeat earnings against a weak regional factory report.
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"This week, we're entirely focused on a market that is luckily treating earnings on a case-by-case basis," said Art Hogan, managing director at Lazard Capital Markets. "You've got a general market trend where investors are comfortable with stocks for now—for now, we've a better understanding of Fed tapering means."
The Dow Jones Industrial Average finished 22 points higher at 15,567.74. United Tech gained, while Travelers slumped. The blue-chip index traded in a tight 60-point range.
The S&P 500 and the Nasdaq closed slightly lower. Earlier, the S&P 500 traded within two points of touching the 1,700-point mark. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, dipped near 12.
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Among key S&P sectors, telecoms led the gainers, while consumer staples dipped.
DuPont rallied after the chemical company edged past earnings expectations by a cent and said it is exploring selling its performance chemicals unit. Fellow Dow component United Technologies rose after the multinational conglomerate beat profit estimates and lifted the lower end of its yearly forecast and said it is well positioned for a return to organic growth in the second half of the year.
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On the economic front, manufacturing activity in the central Atlantic region contracted in July, dropping to minus 11 from a downward revised plus 7 in June, according to the Federal Reserve Bank of Richmond. Above zero indicates an expansion.
Treasury prices remained lower after the government auctioned $35 billion in 2-year notes at a high yield of 0.336 percent. The bid-to-cover ratio, an indicator of demand, was 3.08, versus a recent average of 3.54.
In global markets, Chinese stocks boosted shares across Asia following market rumors that China could take stimulus measures to boost its economy.
Chinese shares outperformed after state newspaper Beijing News reported that Chinese Premier Li Keqiang had said the government would not allow the country's gross domestic product growth to fall below 7 percent.
Comments from China's vice-premier, Zhang Gaoli, also bolstered sentiment this week. He reiterated Beijing's commitment to supporting the export and services industries, while steering the economy towards consumer-oriented growth, according to Reuters.
"Momentum remains positive for equities, which were given a further boost this morning as Premier Li confirmed that the minimum level for growth in China would be 7 percent, raising the potential prospect of stimulus measures to support the Chinese economy and its bottom line growth target," said Rebecca O'Keeffe, head of investment at Interactive Investor.
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