IE 11 is not supported. For an optimal experience visit our site on another browser.

Late-day bounce pushes Wall Street higher

A late-day rebound gave stocks a moderate advance Tuesday, as sharply lower oil prices and an unexpected jump in consumer confidence settled unease over a batch of mixed earnings.
/ Source: The Associated Press

A late-day rebound gave stocks a moderate advance Tuesday, as sharply lower oil prices and an unexpected jump in consumer confidence settled unease over a batch of mixed earnings.

The market fluctuated through much of the session after disappointing results from UPS Inc. and 3M Co. stoked concerns about the health of corporate profits. McDonald’s Corp. and AT&T Inc. both had strong earnings, but anxiety over interest rates and geopolitical tension kept investors from extending a solid advance in the prior session.

Wall Street maintained some optimism from a rise in consumer confidence for July, while a gentle slowdown in existing home sales last month also brightened hopes of a soft landing for the economy.

Although stocks managed to bounce back in the last hour of trade — the Dow Jones industrial average reversed course and added as much as 83 points — analysts say the lack of a significant catalyst meant the move higher was not substantial.

“I think there was some degree of relief when the market was able to hold to the lows and not follow the pattern of the past couple of months: following up days by giving everything back,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments. “The catalysts you would look for were all present in the morning, but the market traded lower.”

Crude oil prices tumbled, as energy traders awaited developments in the conflict between Israel and Hezbollah in Lebanon.

After a seesaw day of trading the Dow Jones industrial average finished the session higher by 52.66 points, or 0.48 percent, having surged 183 points in the prior session. The broader Standard & Poor’s 500-stock index closed up 7.97 points, or 0.63 percent, while the Nasdaq composite index added 12.06 points, or 0.58 percent.

Recent skittish trading has underscored Wall Street’s lack of near-term confidence, with stocks showing heavy swings but no clear direction. Investors have been troubled by the range of possible outcomes for interest rates and the economy, and analysts say they’ll remain hesitant until at least some of the variables are resolved.

“We’re looking at a picture of the Federal Reserve having raised interest rates to levels above neutral, and may have to raise again,” said Brian Gendreau, investment strategist for ING Investment Management. “The economy is slowing, and there are still concerns about inflation. Plus central banks around the world are also hiking rates.

“Put all of that together, and I can see why apprehensive investors want to stay on the sidelines,” Gendreau said.

In Tuesday’s economic news, the Commerce Department said sales of existing homes slid 1.4 percent to 6.62 million in June, in line with forecasts of 6.6 million. The mild decline reinforced hopes for a gradual slowdown in the economy.

Altria Group Inc., the parent of cigarette maker Philip Morris and Kraft Foods Inc., said its quarterly profit edged up 2 percent and boosted its yearly forecast. Altria climbed 56 cents to $80.05.

DuPont Co.’s earnings slumped 4 percent beneath higher energy costs and weak revenue. DuPont rose 10 cents to $40.67.

AT&T saw an 81 percent surge in quarterly profit from progress in combining its former operations with SBC Communications Inc. AT&T gained $1.17 to $28.95.

McDonald’s posted a steep 57 percent jump in earnings, lifted by sturdy restaurant sales both in Europe and the United States. However, investors locked in profits from early gains, with McDonald’s falling 8 cents to close at $34.76.

Scotch tape and Post-it note maker 3M expressed caution about margins in some businesses. 3M slid $3.58 to $68.11.

UPS plunged $8.20 to $71.80 on its reduced full-year outlook, which overshadowed stronger-than-expected quarterly results.

Overseas, Japan’s Nikkei stock average surged 1.42 percent. Britain’s FTSE 100 added 0.30 percent, Germany’s DAX index sagged 0.22 percent and France’s CAC-40 rose 0.37 percent.