US STOCKS-Wall St on track for fourth day of gains, FedEx jumps
* FedEx up 7 pct, one of day's biggest gainers
* Tesla climbs on news it will be added to Nasdaq 100 index
* Dow up 0.6 pct, S&P 500 up 0.8 pct, Nasdaq up 0.6 pct
By Leah Schnurr
NEW YORK, July 9 (Reuters) - U.S. stocks rose for the fourth session in a row on Tuesday, as investors bet companies will be able to surpass the low bar that has been set for earnings season, leaving room for better-than-expected results that could fuel the rally further.
The push higher in recent days has put the benchmark S&P 500 about 1 percent below its all-time closing high of 1,669.16 reached in late May.
The gains also suggest investors are becoming more comfortable with the prospect of the Federal Reserve slowing the pace of its economic stimulus, which has been a major driver of the equity rally this year.
FedEx Corp was among the best performers on the S&P, rising on speculation that billionaire William Ackman would make a big investment in the company. FedEx shot up 6.8 percent to a four-month high of $105.52 in strong volume.
Nine of the S&P's 10 industry sector indexes were higher. Industrial and material shares recorded the biggest gains, though Alcoa Inc, the first Dow component to release results for the second quarter, declined 0.6 percent to $7.87 after releasing results after Monday's close.
For the most part, analysts are expecting second-quarter results to be soft, with weak sales, but expectations are for a pickup later in the year. Even so, investors are starting to think earnings expectations may have been ratcheted down too low.
"We think we have the potential once again for an earnings season where expectations are a little too low, and when the earnings finally do come out, we could have a little bit of an upside surprise," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
Analysts expect S&P 500 companies' earnings to grow 2.9 percent in the second quarter from a year ago, well below the 6.1 percent that was forecast in April, according to Thomson Reuters data.
Forecasts for growth in the first quarter were similarly revised lower to as little as 1.5 percent. The earnings season ended up beating that with 5.4 percent growth.
The Dow Jones industrial average gained 89.93 points, or 0.59 percent, to 15,314.62. The Standard & Poor's 500 Index rose 12.98 points, or 0.79 percent, to 1,653.44. The Nasdaq Composite Index climbed 20.90 points, or 0.60 percent, to 3,505.73.
Alcoa reported adjusted profit and revenue above Wall Street forecasts and said it sees solid growth in global demand for its products this year.
Volatility has plunged in recent weeks on waning fears about imminent reductions in the Federal Reserve's $85 billion a month of bond purchases. The Market Volatility Index, Wall Street's favorite barometer of investor fear, has tumbled more than 30 percent since late June. On Tuesday the index was down 3.5 percent.
The earnings calendar remains light until Friday when JPMorgan Chase and Wells Fargo are set to report.
Tesla Motors Inc jumped 2.5 percent to $124.63 as Nasdaq OMX Group Inc said it will replace Oracle Corp in the Nasdaq 100 stock index, reflecting the rising profile of the U.S. electric car maker.
Intuitive Surgical shares slid 18.2 percent to $408.78 after the maker of the Da Vinci surgical robot said on Monday it expects second-quarter revenue below analysts' expectations.
On Wednesday afternoon, the Fed is scheduled to release the minutes from its June policy meeting. Investors will eye the minutes for any clues into the timing of possible trimming of stimulus measures.
- Rebellious Nevada rancher's slavery remarks dim Republican support
- Ukraine forces kill up to five rebels, Russia starts drill near border |
- Search for missing Malaysian jet may take years: U.S. official
- Boy and girl on Korean ferry drowned with life jackets tied together |
- New report calls U.S. a 'rising star' of global manufacturing