Tuesday, Apr 17, 2012

--Stocks rise after strong Spanish bond auction

--March housing starts, permits mixed; March industrial output flat

--Coca-Cola gains; Johnson & Johnson, Goldman slip

--Europe rallies on strong Spanish debt auction, positive German data 


   By Chris Dieterich and Tomi Kilgore 
   OF DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Stocks advanced as easing concerns about Spain's borrowing costs offset flat readings on domestic industrial output and a mixed report from the housing market.

The Dow Jones Industrial Average climbed 140 points, or 1.1%, to 13060 in morning trading. The Standard & Poor's 500-stock index gained 14 points, or 1%, to 1384, and the Nasdaq Composite rose 38 points, or 1.3%, to 3026.

Tuesday's earnings calendar was heavy with quarterly earnings reports from U.S. blue-chips, and energy and industrial stocks led the market higher.

Coca-Cola Co., up 2.5%, led the Dow's advance after the beverage giant reported first-quarter earnings and revenue that exceeded expectations, as both volumes and price gains bolstered results.

Johnson & Johnson, another Dow component, fell 0.5% after the health-care conglomerate reported first-quarter earnings that beat forecasts, although top-line results came up a bit shy.

Elsewhere, Goldman Sachs inched down less than 0.1% after beating profit expectations as revenue fell less than feared from a year ago, but first-quarter results show the toll choppy markets have taken on the firm's operations. Goldman also raised its quarterly dividend 31% to 46 cents a share.

Muted economic reports didn't restrain Tuesday's stock gains. Before the opening bell, data showed U.S. home construction fell 5.8% in March, the second straight monthly decline. The reading was well below expectations for a 0.7% increase. Meanwhile, the number of new housing permits rose 4.5% last month, and reached their highest level since September 2008. Economists had forecast a modest decline.

Separately, industrial production was flat for the second straight month in March while capacity utilization slipped from February, signals that a key engine of the U.S. economy is stalling.

"What we're seeing is a slight improvement in fundamentals, but we need to extend our patience forward in the long recovery for housing market. Global economic activity has slowed and industrial growth is on the softer side, but not falling off a cliff," said Anthony Chan, chief economist at J.P. Morgan Private Wealth Management.

"The reason the market doesn't care is that they are obviously focusing on Spain," he said.

Spain sold more debt that it had planned on Tuesday, a sign of healthy demand on the part of investors. Yields on 10-year Spanish government bonds fell back below 6% after the bond auction, after cresting above that threshold on Monday for the first time this year.

European bourses were sharply higher, with the Stoxx Europe 600 up 1.3%, as investors cheered the Spanish debt auction, and a surprise improvement in German economic sentiment.

Asian markets were mostly lower. China's Shanghai Composite shed 0.9% after data showed that foreign direct investment in China fell for the fifth straight month in March. Japan's Nikkei Stock Average eased 0.1%.

Crude-oil futures climbed 1.8% to $104.75 a barrel, while gold futures fell 0.6% to $1,639 a troy ounce. The U.S. dollar lost rose against the euro and the yen. The yield on 10-year U.S. Treasury bonds rose to 1.995% as demand and prices fell.

In other corporate news, Apple rose 2%, on pace to snap a five-session streak of declines during the company lost more than $50 billion in market capitalization.

TD Ameritrade inched up 0.1% after reporting fiscal second-quarter earnings slumped 20% as a decline in fees for handling trades weighed on the online brokerage's revenue.

U.S. Bancorp rose 0.8% after the lender's first-quarter profit rose 28% as the lender sharply reduced its credit costs and turned in better-than-expected revenue growth.

State Street gained 0.7% after posting first-quarter earnings fell 9.3% on lower fees and trading services revenue. The trust bank's bottom line has been pressured by historically low interest rates and it was challenged during the second half of 2011 by cautious clients and quiet stock markets, which impacted fees from client activities.

Forest Laboratories rose 2.9% after its fiscal fourth-quarter earnings fell 40% as generic competition to its depression treatment Lexapro hurt sales, though margins improved.

USG rose 1.3% after the building-products company' first-quarter loss narrowed, and sales grew across its businesses, including wallboard, a core top-line contributor.

Omnicom Group fell 2.1% after its first-quarter earnings beat expectations, as the advertising company saw growth in its international revenue.

Apollo Residential Mortgage slid 6.7% after the company said it was beginning a public offering of 13.9 million shares of common stock.

Technology giants International Business Machines, up 1.5%, and Intel, up 0.7%, are scheduled to report first-quarter results after the closing bell.

(END) Dow Jones Newswires

April 17, 2012 10:44 ET (14:44 GMT)