Wall Street snaps three-day losing streak as tech rebounds

NEW YORK Tue Apr 8, 2014 7:03pm EDT

1 of 3. Traders work on the floor of the New York Stock Exchange April 8, 2014.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - U.S. stocks rose on Tuesday, snapping a three-day losing streak as investors bought beaten-down social media and Internet shares.

The day's biggest gainers included Amazon.com Inc (AMZN.O), up 2.9 percent at $327.07; Yahoo Inc (YHOO.O), up 2.3 percent at $33.83; and LinkedIn Corp (LNKD.N), up 5.9 percent at $169.10.

The Global X social media index (SOCL.O) rose 2.4 percent to close at 18.50.

But gains in the blue-chip Dow Jones industrial average were capped by a decline in bank stocks. Goldman Sachs Group (GS.N) fell 1.3 percent to end at $156.56. JPMorgan Chase & Co (JPM.N) slipped 0.3 percent to close at $58.85.

Alcoa Inc (AA.N) kicked off the earnings season after the bell on Tuesday, reporting a first-quarter loss due to a restructuring charge. But the stock jumped more than 2 percent in extended-hours trade.

Retailer Bed, Bath & Beyond (BBBY.O) is scheduled to report earnings on Wednesday, while banks JPMorgan Chase and Wells Fargo & Co (WFC.N) will release results on Friday.

"Ironically, while the S&P is just shy of its all-time high, the number of S&P constituents that have lowered their quarterly EPS outlook is also at an all-time high," said Robbert van Batenburg, director of market strategy at Newedge USA, LLC, in New York.

"While this is a concerning statistic, it has become a tradition for many companies to gradually manage EPS estimates lower throughout the quarter and then subsequently 'beat' the - excessively low - consensus estimates."

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.

Companies across America are blaming the brutal winter for weak first-quarter results, but investors are expecting a quick rebound in the second quarter.

Financial stocks were in the spotlight as regulators finalized the rule to limit banks' reliance on debt. Under the rule, the eight biggest U.S. banks must raise a total of about $68 billion in capital by 2018 to comply with a new rule designed to prevent another financial crisis.

The rules would apply to JPMorgan Chase, Citigroup (C.N), Bank of America (BAC.N), Wells Fargo, Goldman Sachs, Morgan Stanley (MS.N), Bank of New York Mellon (BK.N) and State Street (STT.N).

Biotechnology stocks, which had been punished in the recent selloff, seesawed between gains and losses on Tuesday. The Nasdaq biotechnology index .NBI fell 0.4 percent. Gilead Sciences Inc (GILD.O) was among the S&P 500's biggest decliners, down 3.1 percent at $70.01.

The Dow Jones industrial average .DJI rose 10.27 points or 0.06 percent, to end at 16,256.14. The S&P 500 .SPX gained 6.92 points or 0.38 percent, to finish at 1,851.96. The Nasdaq Composite .IXIC added 33.234 points or 0.81 percent, to close at 4,112.986.

Tuesday's advance followed the S&P 500's biggest three-day retreat since late January and the Nasdaq's steepest three-day drop since November 2011.

The benchmark S&P 500 index rose above its 50-day moving average around 1,840, a key support level. The index has managed to stay above 1,840 several times over the past month.

In contrast to the day's positive trend, shares of Gigamon Inc (GIMO.N) plunged 33.9 percent to close at $17.31. The maker of network traffic management software estimated lower-than-expected first-quarter revenue.

About 6.7 billion shares changed hands on U.S. exchanges, slightly below the 6.8 billion average so far this month, according to data from BATS Global Markets.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 2 to 1. On the Nasdaq, 17 stocks rose for nearly every nine that fell.

(Editing by Jan Paschal)

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