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Stocks advance, pushing Dow toward 14,000
NEW YORK (AP) — Drugmaker Pfizer gave the Dow a lift on Tuesday after posting a strong earnings report. That helped push the index closer to 14,000.
The Dow Jones industrial average was up 67 points to 13,953 points as of 2:02 p.m. EST. The index is on track to record its seventh advance in eight days. The Standard and Poor's 500 also rose, gaining seven points to 1,507 points. The Nasdaq composite dropped less than a point to 3,153.
Stocks are approaching record levels after a January rally that has pushed the Dow 6.5 percent higher this month and the S&P 500 up 5.7 percent, to its highest level since December 2007. Demand was bolstered after lawmakers reached a deal to avoid the "fiscal cliff" at the start of the year and by reports that have added to evidence showing the U.S. housing market is recovering and the jobs market is slowly healing.
Pfizer was the biggest gainer in the Dow, advancing 84 cents to $27.68 after the company said its fourth-quarter profit more than quadrupled because of a $4.8 billion gain from selling its nutrition business and despite competition from generic drugs hurting sales.
Homebuilder D.R. Horton gained $2.11 to $23.41 after it said that net income more than doubled as the housing recovery took hold. Improving home prices and better sales bolstered profits.
Currently, analysts expect fourth-quarter earnings to increase by an average of 4.7 percent for S&P 500 companies, according to the latest data from S&P Capital IQ.
Investor optimism was checked by a report that showed U.S. consumer confidence sank in January to the lowest level in more than a year as Americans fretted about the economic outlook and higher Social Security taxes. The Conference Board said that its consumer confidence index dropped to 58.6 in January, down from a reading of 66.7 in December.
Stocks also failed to get much of a lift from a report published before the market opened that showed the U.S. housing market is sustaining its recovery.
The Standard & Poor's/Case-Shiller 20-city home price index rose 5.5 percent in November compared with the same month a year ago, pushed higher by rising sales and a tighter supply of available homes.
"The turnaround in the housing market is for real," said Peter Cardillo, chief market economist at Rockwell Global Capital, who says the decline in consumer confidence likely will prove to be temporary as home prices rise. He predicts that the S&P 500 may climb as high as 1,575 this quarter as investor optimism about the economic recovery grows.
The Federal Reserve starts a two-day meeting Tuesday. Investors will also be looking at the release of their statement Wednesday for clues about the outlook for the economy and interest rates.
The yield on the 10-year Treasury note rose by 4 basis points to a fraction short of 2 percent and briefly reached that level in afternoon trading. The yield on the note, which moves inversely to its price, rose briefly above 2 percent for the first time since April during trading Monday.
Other stocks in the news:
• Ford fell 80 cents to $12.98 despite reporting earnings that beat analysts' estimates. The automaker said that its losses in Europe would be bigger than it had previously forecast. The company's stock has advanced 56 percent in the past six months.
• Valero Energy, a refinery operator, climbed $4.24 to $43.06 after the company said Tuesday that fourth-quarter profit soared on higher refining margins, as it swapped out foreign crude for cheaper domestic oil.
• Seagate Technology, which makes hard-disk drives for storage, fell $3.68 to $33.73 after it reported a 13 percent drop in profits as expenses outpaced revenue growth.
• Software company VMware fell $20.60 to $77.64 after it said late Monday that it expects first-quarter revenue to come in lower than Wall Street analysts had forecast. The company also is cutting 900 jobs, or about 7 percent of its workforce.
By John R. Bolton
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