Wall Street ends up on earnings, rebound in high-growth shares

NEW YORK Tue Apr 29, 2014 4:55pm EDT

1 of 2. Traders work on the floor of the New York Stock Exchange April 24, 2014.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - U.S. stocks rose on Tuesday, boosted by upbeat results from companies including Merck & Co and a rebound in Facebook and other high-growth shares.

Merck & Co (MRK.N)'s shares climbed 3.6 percent to $58.72, giving the S&P 500 its biggest lift, after it reported stronger-than-expected earnings.

Further deal activity on the healthcare front also lifted the market. Britain's Reckitt Benckiser Group Plc (RB.L) confirmed talks to buy Merck's consumer health business, the latest asset up for grabs in a wave of recent pharmaceutical deals.

"Investors are viewing (that activity) as a signal for positive conditions in which businesses are willing and able to offer substantial sums of cash and/or stocks," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Also supportive: most S&P 500 companies are beating earnings forecasts, albeit on lowered expectations, he said.

Earnings estimates have rebounded, however, as more companies have reported results. First-quarter profit growth for S&P 500 companies is seen at 3.7 percent, based on actual results and estimates for companies yet to report, compared with a forecast for 2.1 percent growth at the beginning of the month, Thomson Reuters data showed.

The Dow Jones industrial average .DJI rose 86.63 points or 0.53 percent, to 16,535.37, the S&P 500 .SPX gained 8.9 points or 0.48 percent, to 1,878.33 and the Nasdaq Composite .IXIC added 29.142 points or 0.72 percent, to 4,103.543.

Shares of Facebook (FB.O), up 3.6 percent at $58.15, led the way higher on the Nasdaq, a day after selling off along with a host of other momentum names.

Shares of Twitter (TWTR.N) jumped 4.6 percent to $42.62 ahead of its results after the bell, when it reported 255 million monthly active users, up from the previous quarter but not enough to satisfy investors. The stock was down 10.2 percent in after-hours trading.

Also after the bell, shares of eBay (EBAY.O) fell 3.8 percent to $52.45 as its second-quarter forecast fell short of estimates.

During the regular session, Sprint Corp (S.N) shares jumped 11.3 percent to $8.27. The No. 3 U.S. mobile provider reported an increase in quarterly revenue, as expected, due to a new billing plan that lowered wireless expenses.

On the down side, Coach Inc (COH.N) reported a sharp drop in North American sales and the stock slumped 9.3 percent to $45.71.

Archer Daniels Midland Co (ADM.N) finished down 2.6 percent at $43.23 after its first-quarter profit and sales missed Wall Street estimates.

About 6.3 billion shares changed hands on U.S. exchanges, below the 6.6 billion average this month, according to data from BATS Global Markets.

The Fed's two-day policy meeting began on Tuesday, with the central bank expected to again scale back its monthly bond purchase program. Investors will also be eager to get any guidance on when it might raise interest rates.

Data suggested the economy continued to gain momentum after the winter lull. U.S. consumer confidence dipped in April but remained near a six-year high, while home prices rose in February.

(Editing by Bernadette Baum and Nick Zieminski)

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