Market Wrap: Dow, S&P 500 Rise on Merck, IBM; Nasdaq Slips

Financial Markets Wall Street
Richard Drew/AP

By Caroline Valetkevitch

NEW YORK -- The Dow and S&P 500 ended a volatile session higher on Tuesday, helped by strong earnings from Merck and gains in IBM after it boosted its dividend, while the Nasdaq fell with Apple.

Adding to volatility just before the close, shares of Twitter (TWTR) dropped as much as 24 percent after its results were published early. The stock closed down 18.2 percent at $42.27.

IBM (IBM) shares rose 1.9 percent to $173.92, giving the Dow its biggest boost. The company hiked its quarterly dividend by 18 percent, the biggest increase in five years. Shares also closed above their 200-day moving average, a bullish technical signal.

%VIRTUAL-pullquote-There continues to be the bull-bear push, even with the good numbers you saw from Merck.%Apple (AAPL) swung between gains and losses a day after reporting results. The stock hit a record high in early trading but shares ended down 1.6 percent at $130.56, weighing on the Nasdaq.

"There continues to be the bull-bear push, even with the good numbers you saw from Merck," and other companies, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"Apple's numbers were phenomenal, but yet the stock is down," he added. "I think people were expecting a blowout quarter ... so it's kind of a sell-the-news situation."

The Dow Jones industrial average (^DJI) rose 72.17 points, or 0.4 percent, to 18,110.14, the Standard & Poor's 500 index (^GSPC) gained 5.84 points, or 0.28 percent, to 2,114.76 and the Nasdaq composite (^IXIC) dropped 4.82 points, or 0.1 percent, to 5,055.42.

Merck (MRK) jumped 5 percent, its biggest percentage increase since January 2014, after reporting better-than-expected results and releasing favorable data late Monday about the safety of its Januvia diabetes drug.

Whirlpool (WHR) fell 7.1 percent to $183.70, the biggest percentage decliner in the S&P 500, after the company cut its 2015 profit and sales forecast, blaming the strong dollar and Brazil's stagnating economy.

Earnings Season

U.S. first-quarter earnings are now on track to post a slight gain after the mostly stronger-than-expected results, defying forecasts for the first profit decline since 2009, Thomson Reuters (TRI) data showed.

Contributing to day's volatility, Iranian Revolutionary Guards forces boarded a Marshall Islands-flagged cargo ship in the Gulf, U.S. officials said. That spurred a brief rally in oil prices.

Investors await the outcome of a two-day Federal Reserve meeting that ends Wednesday, hoping for clues on when the central bank will hike interest rates.

Helping the market early in the session, U.S. single-family home prices rose more than expected in February from a year earlier, according to a survey.

Advancing issues outnumbered declining ones on the NYSE by 1,906 to 1,121, for a 1.70-to-1 ratio; on the Nasdaq, 1,657 issues rose and 1,065 fell, for a 1.56-to-1 ratio favoring advancers.

The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq composite recorded 63 new highs and 39 new lows.

About 6.6 billion shares changed hands on U.S. exchanges, above the 6.3 billion daily average for the month to date, according to BATS Global Markets.

What to watch Wednesday:

  • The Commerce Department releases first-quarter gross domestic product at 8:30 a.m. Eastern time.

  • The National Association of Realtors releases pending home sales index for March at 10 a.m.

  • The Federal Reserve policymakers meet to set interest rates, release statement at 2 p.m.

Earnings Season
These selected companies are scheduled to release quarterly financial results:

  • ADT (ADT)

  • AMC Entertainment (AMC)

  • Anthem (ANTM)

  • Ashland (ASH)

  • Baidu (BIDU)

  • Barclays (BCS)

  • Boston Beer Co. (SAM)

  • Carlyle Group (CG)

  • Cedar Fair (FUN)

  • Con-way (CNW)

  • Deutsche Bank (DB)

  • Fiat Chrysler Automobiles (FCAU)

  • Garmin (GRMN)

  • General Dynamics (GD)

  • Goodyear Tire & Rubber (GT)

  • GrubHub (GRUB)

  • Hess (HES)

  • Hilton Worldwide (HLT)

  • Humana (HUM)

  • International Paper (IP)

  • La Quinta Holdings (LQ)

  • Level 3 Communications (LVLT)

  • Marriott International (MAR)

  • Mastercard (MA)

  • Mondelez International (MDLZ)

  • Norfolk Southern (NSC)

  • Northrop Grumman (NOC)

  • Pacific Gas & Electric Co. (PCG)

  • Pilgrim's Pride (PPC)

  • Praxair (PX)

  • Southern Co. (SO)

  • Spirit Airlines (SAVE)

  • Starwood Hotels & Resorts Worldwide (HOT)

  • Time Warner (TWX)

  • Valeant Pharmaceuticals International (VRX)

  • Vertex Pharmaceuticals (VRTX)

  • Williams Cos. (WMB)

  • Yelp (YELP)