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 Coke and J&J, both Dow components, climbed after their results while
recent outperformers fell, a sign that investors were rotating from
growth stocks into value ones. In recent weeks, high-growth stocks
have been under pressure after a meteoric rise in their prices took
valuations to levels that appeared unsustainable.
The three major U.S. stock indexes fell for much of the session
before rebounding in afternoon trading. The Nasdaq moved in a
108.77-point range, and at its lows of the day, it was within 0.3
percent of 3,934.53, the level that represents a 10 percent drop
from its recent intraday peak, hit on March 6.
"The market is trying to stabilize, and investors are looking for
high-quality names that have stability in their earnings and
prices," said Bruce McCain, chief investment strategist at Key
Private Bank in Cleveland, Ohio. "This afternoon's move is part of
that same flight to quality."
Coca-Cola Co <KO.N> jumped 3.7 percent to $40.18 as one of the S&P
500's biggest gainers after the world's largest beverage maker
reported better-than-expected quarterly revenue, helped by strong
sales in China. Johnson & Johnson <JNJ.N> rose 2.1 percent to $99.20
after the pharmaceuticals and consumer products company posted
earnings that beat expectations and raised its full-year profit
view.
Among the most active "momentum" names, shares of electric car maker
Tesla Motors Inc <TSLA.O> fell 2.1 percent to $193.91 and shares of
online movie rental company Netflix Inc <NFLX.O> dropped 1.6 percent
to $326.27. Intuitive Surgical <ISRG.O> shares fell 1.9 percent to
$417.09.
"We're going through a period of rolling corrections, which will
consolidate the high-growth names that did so great last year," said
Hayes Miller, head of asset allocation in North America at Baring
Asset Management in Boston. "I don't read anything systemic into the
action, as seen by the gains in more defensive areas. The losses
should remain contained."
After the closing bell, Intel Corp <INTC.O> shares rose 3 percent to
$27.56 in extended-hours trading after the chipmaker reported its
first-quarter results and gave an outlook. Yahoo Inc <YHOO.O> shares
rose 1.4 percent to $34.70 after the bell following the company's
results.
The Dow Jones industrial average <.DJI> rose 89.32 points, or 0.55
percent, to end at 16,262.56. The Standard & Poor's 500 Index <.SPX>
gained 12.37 points, or 0.68 percent, to finish at 1,842.98. The
Nasdaq Composite Index <.IXIC> added 11.47 points, or 0.29 percent,
to close at 4,034.16.
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In the latest economic snapshot, a gauge of manufacturing in New
York state grew at a much slower rate in April than it did in March,
coming in far below expectations.
The U.S. Consumer Price Index increased 0.2 percent in March as food
and housing rental costs rose, although inflation pressures remained
generally benign.
S&P 500 companies' first-quarter earnings are projected to have
increased just 1 percent from a year ago, Thomson Reuters data
showed. The forecast is down sharply from the start of the year,
when profit growth was estimated at 6.5 percent.
Twitter Inc <TWTR.N> shares surged 11.4 percent to close at $45.52
after the company said it bought social data provider Gnip for an
undisclosed amount.
Aaron's Inc <AAN.N> shares tumbled 4 percent to end at $29.25 after
the rent-to-own furniture and electronics retailer said it had
rejected a $2.3 billion takeover offer from a major shareholder and
instead acquired a retail credit financing firm for about $700
million.
Barcode printer maker Zebra Technologies <ZBRA.O> said it would buy
Motorola Solutions Inc's <MSI.N> enterprise business, which makes
rugged mobile computers, tablets and barcode scanners, for $3.45
billion in cash. Motorola Solutions shares declined 0.6 percent to
end at $63.37. Zebra shares tumbled 10.1 percent to close at $61.39.
About 58 percent of stocks traded on the New York Stock Exchange
closed higher for the day, while about 50 percent of Nasdaq-listed
shares ended lower.
About 7.62 billion shares traded on all U.S. platforms, according to
BATS exchange data, above the month-to-date average of 6.87 billion.
(Editing by Jan Paschal)
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