* Tuesday's rebound suggests trend of increased volatility
* Google up after Nest purchase; Tesla rallies on deliveries
* GM jumps after-hours, sets 1st dividend in almost 6 years
* Indexes up: Dow 0.7 pct, S&P 1.1 pct, Nasdaq 1.7 pct
By Rodrigo Campos
NEW YORK, Jan 14 U.S. stocks rose on Tuesday,
erasing much of the previous session's steep drop, as a strong
December retail sales reading eased concerns that economic
growth might be slowing.
Google rose 2.4 percent to $1,149.40, giving a
large boost to the outperforming Nasdaq, a day after the company
announced plans to acquire Nest Labs Inc. The $3.2 billion deal
will give Google a promising line of products and a prized
Core U.S. retail sales increased 0.7 percent in December
from the prior month, flying past the 0.3 percent gain
economists had expected. Fourth-quarter economic growth
prospects were further boosted by a report showing retail
inventories, excluding autos, increased 0.6 percent in November.
The data followed Friday's payroll report, which showed job
growth for December that was sharply below expectations.
"Retail sales numbers for December sort of calmed everyone
down," said Paul Mendelsohn, chief investment strategist at
Windham Financial Services in Charlotte, Vermont. "Numbers
indicate the economy is most likely moving forward at a nice
pace despite an errant jobs number last Friday."
The Dow Jones industrial average rose 115.92 points
or 0.71 percent, to 16,373.86, the S&P 500 gained 19.68
points or 1.08 percent, to 1,838.88, and the Nasdaq Composite
added 69.712 points, or 1.69 percent, to 4,183.016.
Tuesday's gains came a day after the S&P 500 posted its
largest drop in two months, and market participants say they are
gearing up for a more volatile 2014 after a year that saw U.S.
stocks constantly go higher.
"We're seeing a good preview of what the year will bring,
which is a little bit more volatility," said Andres
Garcia-Amaya, Global Market Strategist at J.P. Morgan Funds.
The CBOE volatility index dropped 7.5 percent to
12.28 after gaining 9.4 percent on Monday.
"We got accustomed to very low volatility and (a VIX reading
of) 14-16 is not out of the question," Garcia-Amaya said.
Shares of General Motors jumped 3 percent to $41.20
in extended trading after the company said it will pay the first
quarterly dividend on its common stock in almost six years.
Intel Corp shares jumped 4 percent to close at
$26.51 in regular trade after JPMorgan upgraded the stock to
"overweight" from "neutral."
Electric car maker Tesla said deliveries of its
Model S sedan in the fourth quarter blew past its forecast,
sending shares up 15.7 percent to $161.27.
Both JPMorgan Chase & Co and Wells Fargo & Co
posted earnings that beat expectations, though upside
was limited with Wells Fargo shares already near all-time highs
and JPMorgan shares at their highest since 2000. Shares of both
banks rose less than 0.1 percent on the day.
With just 5 percent of the S&P 500 companies having reported
quarterly results, 53.8 percent have beaten earnings
expectations, according to Thomson Reuters data, below the 63
percent historical average. About 62 percent have beaten on
revenue, above the long-term 55 percent average.
Bank of America Corp, Citigroup, Goldman Sachs
and Morgan Stanley will post results later in the
week. General Electric Co and Intel are also on tap.
Both GameStop Corp and Stratasys Ltd
slumped after giving outlooks that were weaker than expected.
GameStop lost 19.9 percent to $36.31, while 3D printer maker
Stratasys slid 8.2 percent to $119.37.
In contrast, Intuitive Surgical advanced 6.8
percent to $419.88 after the surgical equipment maker gave a
strong fourth-quarter outlook.
Charter Communications is trying to strike a deal
to buy Time Warner Cable and sway its shareholders after
three of its offers have been rebuffed. On Monday, Charter took
its approach public and proposed paying $132.50 per TWC share.
TWC shares gained 2.7 percent to $136 and Charter added 2.3
percent to $137.34.
Volume was roughly in line with the year-to-date average of
about 6.5 billion shares traded on U.S. exchanges, according to
data from BATS Global Markets. Monday's sharp decline came in
volume of 7.22 billion shares.
Advancing stocks outnumbered decliners on the NYSE by 12 to
5 and on the Nasdaq three issues rose for every one that fell.