US stocks rose on Tuesday on hopes that Greek debt negotiations could result in a deal that stabilises Europe although a drop in oil prices limited the advance. S&P 500 utilities and healthcare stocks led the market increase as those sectors bounced back after they declined the day before, while the energy sector was hurt the fall in oil prices.
Investors are sticking to trading within a narrow range as they wait for geopolitical news from Greece and Ukraine, said Adam Sarhan, chief executive of Sarhan Capital in New York. "Today you're bouncing off a 50 day moving average, which is a pure technical play. The fundamentals are improving a little bit because the situation in Ukraine did not explode. That was a concern over the weekend. Also Greece hasn't fallen off the radar," Sahran said. "Investors are looking at this as a cup that's half full, not half empty."
The European Commission said there was no formal proposal for resolving Greece's debt problems, although talks were intensive ahead of a series of meetings of euro zone finance ministers and EU leaders in Brussels. But the Commission is expected to introduce a compromise proposal, according to a report by MNSI, citing unnamed sources. "Clearly the market thinks some resolution's going to come out of this that's going to make bondholders not suffer the consequences," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
The first drop in oil prices in four sessions pushed the energy index, down 0.5 percent, making it the only S&P sector in the red. US crude prices fell 5 percent after the International Energy Agency warned of more selloffs in the near term as stockpiles continue to rise. At 3:07 pm.the Dow Jones industrial average rose 139.02 points, or 0.78 percent, to 17,868.23, the S&P 500 gained 21.25 points, or 1.04 percent, to 2,067.99 and the Nasdaq Composite added 59.42 points, or 1.26 percent, to 4,785.43.
Coca-Cola Co shares climbed 3 percent boosting both the Dow and S&P 500 after it reported a better-than-expected profit. Apple Inc shares rose 1.9 percent and helped boost the Nasdaq and the S&P 500 after it priced Swiss franc bonds. Pfizer Inc rose 3 percent, lifting the S&P healthcare sector after saying it would buy back $5 billion of its stock.
Even with high-profile earnings misses from multinationals, largely as a result of dollar strength, Thomson Reuters data through Tuesday morning showed that 72.7 percent of S&P 500 companies beat earnings estimates, above the 69 percent beat rate in the past four quarters. NYSE advancing issues outnumbered declining ones by 1,698 to 1,355, for a 1.25-to-1 ratio on the upside; on the Nasdaq, 1,649 issues rose and 1,082 fell for a 1.52-to-1 ratio favouring advancers. The benchmark S&P 500 index was posting 28 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 51 new highs and 34 new lows.
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