U.S. stocks rose Tuesday, clawing back some of the previous day's losses as positive earnings news helped buoy shares. The Dow Jones Industrial Average rose 65.16 points, or 0.53%, to finish near the day's highs at 12266.75. The Standard & Poor's 500-stock index added 7.48 points, or 0.57%, to 1312.62 while the Nasdaq Composite gained 9.59 points, or 0.35%, to 2744.97. The gains came one day after the Dow fell 140 points on credit-ratings firm Standard & Poor's decision to lower its outlook on the U.S. government's AAA credit rating.
Traders and investors said that many of those worries were being shrugging off a day later. Johnson & Johnson led the Dow higher, gaining 3.7% after the blue chip health care and consumer-products company beat first-quarter earnings expectations and raised its full-year earnings outlook. The company didn't address negotiations to acquire medical device maker Synthes, confirmed by the Zurich-traded company Monday. Synthes gained 0.6%.
Energy stocks also were strong, as oil jumped to over $108 a barrel. Exxon Mobil and Chevron gained 0.8% and 0.9%, respectively. Financial stocks were mixed as a number of big banks reported earnings. Goldman Sachs Group's first-quarter earnings and revenue easily topped forecasts, but concerns arose about the sustainability of its gains. Goldman fell 1.3%.
European stocks partially recovered Tuesday from one of the deepest declines in weeks, as well-received company updates boosted shares of LVMH Moet Hennessy Louis Vuitton SA, Burberry Group PLC and SKF AB. The Stoxx Europe 600 index rose 0.5% to settle at 274.42. Earnings news drove several stocks higher. One of the biggest gainers on the Stoxx 600 was Swedish ball-bearings maker SKF, up 6.4% after the company reported first-quarter attributable net profit beat expectations.
Shares in the luxury sector stood out Tuesday. LVMH jumped 5% in Paris after the company said late Monday that its first-quarter revenue grew 17% to EUR5.25 billion on a reported basis, also topping analyst expectations. In London, Burberry rallied 6% after fourth-quarter revenue excluding Spain rose 32%.
Meanwhile, shares of supermarket group Tesco PLC fell 1.6%. The company said its fiscal-year net profit increased 14%, but that it also saw weak U.K. sales. London's FTSE 100 index rose 0.5% to close at 5,896.87. Mining stocks contributed to gains on rising metals prices. Shares of Fresnillo PLC rose 3%, Anglo American PLC gained 2.4%, and Lonmin PLC added 1.8%. Germany's DAX 30 index edged up 0.2% to settle at 7,039.31, while France's CAC 40 index added 0.7% to finish at 3,908.58, helped in part by gains for auto shares.
The European Automobile Manufacturers' Association said European Union new-car registrations fell 5% overall in March, with most European markets weak outside Germany and France. Shares of BMW AG jumped 2.8% and those of Volkswagen AG rose 1.5%, while Peugeot SA added 2.6%.
Asian shares fell Tuesday after the S&P outlook cut for U.S. government debt. Many resource-sector stocks declined as crude-oil and base-metal prices lost ground on the ratings agency's warning, while regional chip makers were also hurt by Texas Instruments' profit warning. Trading volumes were light ahead of the Good Friday and Easter holidays in some regional markets, with some analysts also viewing the day's sell-off as a temporary reaction. Japan's Nikkei Stock Average fell 1.2% to 9,441.03, China's Shanghai Composite shed 1.9% to 2,999.04, Hong Kong's Hang Seng Index lost 1.3% to 23,520.62, Taiwan's Taiex slid 0.9% to 8,638.55 and South Korea's Kospi dropped 0.7% to 2,122.68.
The yen's strength after the S&P announcement on the U.S. ratings outlook weighed on Tokyo shares, sending exporters such as Canon and Toyota Motor down 1.8% and 3.1%, respectively. Shares of technology firms dropped after U.S. chip maker Texas Instruments said its first-quarter results and second-quarter guidance were hurt by the March 11 earthquake in Japan. Renesas Electronics tumbled 5.4% and Elpida Memory sank 4.8%.
In Seoul, Samsung Electronics overcame early losses it suffered following news that Apple had filed a lawsuit in a U.S. court, claiming the South Korean handset maker copied the U.S. maker's popular iPhone smartphones. The stock finished 0.9% higher.
Also helping to support the South Korean market, shares of LG Display and LG Electronics rose 6.2% and 2.5%, respectively, on hopes of improved second-quarter earnings. Resource stocks skidded after several commodity prices fell in the wake of the S&P downgrade. In Hong Kong, Cnooc fell 2.1%, while Aluminum Corp. of China and Jiangxi Copper tumbled 3.9% and 3.4%, respectively, in Shanghai.
Base metals closed mostly higher on the London Metal Exchange Tuesday, supported by renewed signs of economic growth in the U.S. and buoyant equities markets. As a result of the more confident market mood, flagship three-month copper closed 1.3% higher at $9,340 a metric ton at the PM kerb close. A weaker dollar pulled oil futures higher Tuesday, after a report showing unexpected euro-zone growth sent the greenback falling against the euro. Light, sweet crude oil for May delivery settled up $1.03, or 1%, at $108.15 a barrel on the New York Mercantile Exchange.
With the expiration of the May contract, the more heavily traded June contract settled up 59 cents, or 0.6%, at $108.28. Brent crude on the ICE Futures Exchange settled down 28 cents, or 0.2%, at $121.33 a barrel. The dollar fell steadily throughout the day Tuesday after a report showing unexpected private-sector growth in the euro zone propelled the single currency higher.
Preliminary results from Markit's euro-zone composite purchasing managers' index showed economic activity in the currency bloc grew the second-fastest rate in April since mid-2007. Gold futures climbed to a record $1,500, despite a sluggish move up, as traders drew positive sentiment from a weaker dollar and higher oil prices.
The thinly traded April-delivery contract settled at a record $1,494.50 a troy ounce, up $2.20 or 0.2%, on the Comex division of the New York Mercantile Exchange. The contract's intraday record was at $1,499.50, just shy of the magic $1,500. The most actively traded gold contract, for June delivery, gained 0.2%, or $2.20, to hit a fresh settlement record of $1,495.10 a troy ounce. It had reached $1,500.50 a troy ounce in afternoon trade.