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Stocks close higher, Dow breaks 5-day losing streak

Stocks surged on Tuesday, with the Dow rebounding from a five-session rout, as investors embraced better-than-expected quarterly earnings from companies including D.R. Horton and Pfizer.

After losing 3.77 percent since last Tuesday, its worst five-day percentage decline since April 2012, the Dow Jones Industrial Average ended up 90 points, with Pfizer leading blue-chip gains after the largest U.S. drugmaker reported better-than-expected fourth-quarter results.

The S&P 500 added 10 points and the Nasdaq finished 14 points ahead.

Apple fell almost 8 percent after reporting iPhone sales missed Wall Street estimates. Billionaire investor Carl Icahn then said he had purchased another $500 million Apple shares. D.R. Horton rallied after the homebuilder's sales picked up in January, with the company reporting its most profitable first quarter since 2006.

Of the 153 companies in the S&P 500 that have reported fourth-quarter results, 69.3 percent have reported earnings above Wall Street's estimates, while 68.6 percent have posted revenue that topped expectations, according to Greg Harrison, senior research analyst at Thomson Reuters.

"Earnings growth is not overwhelming, but enough to propel us forward," said Chip Cobb, portfolio manager at BMT Asset Management.

The Federal Reserve's Open Market Committee began its last meeting under Chairman Ben Bernanke Tuesday. The Fed last month said it would start to trim its monthly bond buying by $10 billion to $75 billion this month.

Consumer confidence rose to 80.7 in January, versus expectations the index would come in at 78.1, unchanged from the prior month.

Ahead of Tuesday's opening bell, stock-index futures scaled back their limited gains after the government reported durable goods fell 4.3 percent in December. In addition, the Case-Shiller home price index rose 13.7 percent in November.

"Consumption is mild at best. Businesses are spending to a very minor degree, and much of that is on IT and some equipment. That bodes back to companies trying to keep productivity at peak levels with a minimum number of people," said Cobb of the durable-goods data.

The price of crude rose, with oil futures up $1.69 at $97.47 a barrel. Gold fell $12.60, or 1 percent, to $1,250.80 an ounce.

The dollar edged higher against currency rivals and the yield on the 10-year Treasury note held steady at 2.757 percent.

On Monday, U.S. stocks fell as investors worried about China's economy and considered the Fed's monetary policy.

"I don't think it's all that disheartening; we were probably ahead of ourselves at the end of the year, and there's probably more to come," said Cobb of Wall Street's recent retreat, with has the S&P 500 down more than 3 percent in January. "I anticipate we're going to be higher at the end of the year then we are now," he said.