Stocks trade higher amid earnings, data

Brendan McDermid | Reuters Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

U.S. stocks gained on Tuesday as investors digested the first of the major earnings reports and moderate economic data. (Tweet This)

There’s “more good news than bad,” said Art Hogan, chief market strategist at Wunderlich Securities. “We haven’t had anybody bomb yet.”

He said that after an inital reaction to earnings headlines, traders will eye the conference calls for additional insight.

Futures edged lower after economic reports. Retail sales showed an increase of 0.9 percent, slightly below expectations of a 1.1 percent month-on-month increase in overall spending. However, the figure was the first gain since late last year.

The Producer Price Index (PPI) showed an increase of 0.2 percent in March, in line with expectations and breaking four consecutive months of declines.

“Earnings are going to be the driving force for the next few weeks” until you start to see some commonality in the guidance, said Maris Ogg, president of Tower Bridge Advisors. “I think investors are going to be reacting to bad news as much as good news and I think the path of least resistance is still down.”

Following the data reports, the U.S. 10-year Treasury yield fell to 1.86 percent. The 2-year Treasury yield dipped to 0.50 percent.

“I think across the board it’s a little bit disappointing. People have been jumping all over March as spring rebound month. I think it’s a little too early,” said Bob Sinche, global strategist at Amherst Pierpont. “I think the bond market had come in a little bit short, expecting a good retail number.”

“I don’t think it’s the end of the dollar rally. I think it was a bit overdone. $1.05 is a very difficult area for the euro to break through. it’s got to be a dollar trade,” he said, adding it needs stronger us data to drive it.

The U.S. dollar edged lower after the data releases, with the euro near $1.06.

“Obviously the bond market is not worried these numbers might inspire the Fed to raise rates in June,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “The economic was all not that negative but doesn’t support the Fed raising rates in June.”

JPMorgan’s net income rose to $5.91 billion, or $1.45 per share, in the first quarter ended March 31, from $5.27 billion, or $1.28 per share, a year earlier, according to Reuters. CEO Jamie Dimon said the company is getting safer and stronger, as well as gaining market share.

Read More Markets look to bank earnings, retail data

Wells Fargo posted earnings of $1.04 per share, six cents above estimates, with revenue also above forecasts. The report did break an 18-quarter streak of higher year-over-year earnings, as the bank deals with the impact of a lower interest rate environment.

Johnson & Johnson beat on both the top and bottom lines but reported an 8.6 percent decline in quarterly profit as the impact of a strong dollar on overseas revenue offset growing sales of its mainstay older drugs.

The strong greenback will remain in focus after the dollar index against a basket of currencies rose close to 100 on Monday.

While overall S&P 500 earnings are expected to be down by 2.9 percent, the profits of financial companies are expected to be 10.8 percent higher, according to Thomson Reuters.

The Dow Jones Industrial Average opened up 45 points, or 0.25 percent, at 18,022.

DJIA Dow Jones Industrial Average 18026.79
49.75 0.28%
S&P 500 S&P 500 Index 2096.27
3.84 0.18%
NASDAQ Nasdaq Composite Index 4995.44
7.19 0.14%

Business inventories are due at 10:00 a.m. ET. Intel and CSX are both due to report after the bell.

Read More The tech trade: 5 stocks to buy

New York Federal Reserve President William Dudley will speak at 8:40 a.m. and Minneapolis Fed President Narayana Kocherlakota will speak at 8 p.m.

Meanwhile in Europe, shares were lower in morning trade Tuesday, amid investor caution over a European Central Bank (ECB) meeting this week and the official start of the first-quarter earnings season.

In other corporate news, Finland’s Nokia confirmed Tuesday that it is in “advanced” merger discussions with telecoms company Alcatel-Lucent, following rumors of a tie-up.

IBM is creating a new “Watson Health” unit, in an extension of its data analytics partnership with Apple. The new unit will provide data analytics to health care companies, using information gathered by Apple devices.

Read More Early movers: JPM, DD, NSC, BABA, PG, AVP & more

Norfolk Southern said it expected to earn $1 per share for the first quarter, below current consensus estimates of $1.25. The rail operator said slower coal volumes and a reduction in fuel surcharge revenue are among the factors weighing on the bottom line. The warning is also impacting other rail stocks, like Union Pacific.

CNBC’s Patti Domm and Peter Schacknow contributed to this report.

On tap this week:


Earnings: Intel, CSX, Linear Tech, JB Hunt Transportation, Fastenal

10:00 a.m.: Business inventories

8:00 p.m.: Minneapolis Fed President Narayana Kocherlakota


Earnings: Bank of America, US Bancorp, Burberry, Charles Schwab, PNC Financial, Netflix, SanDisk, Universal Forest Products, Progressive, ASML Holdings

8:30 a.m.: Empire State survey

9:00 a.m.: St. Louis Fed President James Bullard

9:15 a.m.: Industrial production

10:00 a.m.: NAHB survey

10:40 a.m.: Fed Vice Chairman Stanley Fischer, moderating IMF panel

2:00 p.m.: Beige Book

4:00 p.m.: TIC data


Earnings: BlackRock, Citigroup, Goldman Sachs, Blackstone, American Express, Schlumberger, Celanese, Crown Holdings, UnitedHealth, Taiwan Semiconductor, Philip Morris, First Republic Bank, KeyCorp, Mattel, Sherwin-Williams, Sonoco Products, PPG Industries, WW Grainger

8:30 a.m.: Initial claims

8:30 a.m.: Housing starts

10:00 a.m.: Philadelphia Fed survey

1:00 p.m.: Atlanta Fed President Dennis Lockhart

1:10 p.m.: Cleveland Fed President Loretta Mester

1:30 p.m.: Boston Fed President Eric Rosengren

3:00 p.m.: Fed Vice Chairman Fischer on inflation at IMF spring meeting


Earnings: GE, Honeywell, Synchrony Financial, Comerica

8:30 a.m.: CPI

10:00 a.m.: Consumer sentiment

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