Stock Markets End with Modest Gains Amid Encouraging Earnings Reports

Strategic Insights -

The stock markets ended on a high note on Tuesday, with major indices rebounding from a sluggish start to the week. The Dow Jones Industrial Average (DJIA) gained 0.5% to close at 12,266.75, while the Standard & Poor 500 Index (S&P 500) rose 0.6% to 1,312.62. The Nasdaq also gained 0.4% to 2,744.97. The day's gains were driven by a slew of encouraging earnings reports from bellwether companies, including Johnson & Johnson, International Business Machines Corp. (IBM), Intel Corporation (INTC), and VMware Inc. (VMW).

Key Takeaways:

  • The Dow Jones Industrial Average (DJIA) gained 0.5% to close at 12,266.75 on Tuesday.
  • The Standard & Poor 500 Index (S&P 500) rose 0.6% to 1,312.62, just 2.50 points lower than its 50-day moving average.
  • The Nasdaq gained 0.4% to 2,744.97.
  • Encouraging earnings reports from bellwether companies, including Johnson & Johnson, IBM, Intel, and VMware, helped boost the markets.
  • Johnson & Johnson reported first-quarter 2011 earnings of $1.35 per share, exceeding estimates and driving a 2.5% gain in its shares.
  • IBM's profits soared 10% on a yearly basis, with revenues jumping 8% year over year.
  • Intel's revenues increased by 25% year over year to an all-time record of $12.9 billion.
  • VMware and Yahoo! Inc. also surpassed analysts' expectations, with shares of VMware surging 12.5% in after-hours trading.
  • The fear-gauge CBOE Volatility Index (VIX) dropped below 16, indicating a decrease in investor fear.
  • The New York Stock Exchange (NYSE) saw a tight volume day, with only 6.65 billion shares traded compared to the daily average of 8.47 billion last year.

Statistics:

  • DJIA closed at 12,266.75 on Tuesday, a 0.5% gain.
  • S&P 500 Index rose 0.6% to 1,312.62 on Tuesday.
  • Nasdaq gained 0.4% to 2,744.97 on Tuesday.
  • Johnson & Johnson's first-quarter 2011 earnings were $1.35 per share, exceeding estimates.
  • IBM's profits increased 10% year over year, with revenues jumping 8% year over year.
  • Intel's revenues reached an all-time record of $12.9 billion, a 25% year-over-year increase.
  • VMware's shares surged 12.5% in after-hours trading.
  • The CBOE Volatility Index (VIX) dropped below 16, indicating a decrease in investor fear.
  • Only 6.65 billion shares were traded on the NYSE, AMEX, and Nasdaq on Tuesday, a significant drop from the daily average of 8.47 billion last year.

Sources:

  • Zacks Investment Research
  • Economics Week editors
  • VerticalNews.com
  • Official reports from Johnson & Johnson, IBM, Intel, and VMware