* Dow Chemical jumps on Third Point stake
* Verizon, Travelers and J&J all fall after results
* 70 S&P 500 companies to report earnings this week
* Dow off 0.3 pct, S&P up 0.2 pct, Nasdaq up 0.5 pct
By Ryan Vlastelica
NEW YORK, Jan 21 U.S. stocks mostly rose on
Tuesday, putting the S&P 500 on pace to snap a two-session
decline as material stocks rallied, though the Dow fell on
disappointing earnings by three of its components.
Trading was volatile, with the S&P fluctuating between
positive and negative territory throughout the session, while
the Dow moved between modest and solid losses and the Nasdaq
swung between modest and strong gains.
The S&P materials index rose 0.9 percent as the
best performing of the 10 major S&P indexes, led by a 4.9
percent gain in Dow Chemical to $45.18. Activist
investor and hedge fund manager Daniel Loeb has taken a stake in
the company and wants it to spin off its petrochemical arm.
In addition, Alcoa Inc jumped 8.1 percent to $12.28
following an upgrade to "overweight" from JPMorgan. The firm
also lifted its price target on the aluminum company to $15 from
Energy stocks, another group with some correlation
to the pace of economic growth, also advanced, rising 0.6
"We still think economically sensitive stocks have room to
run... Those have the potential to be long-term winners," said
Jeff Mortimer, director of investment strategy for BNY Mellon
Wealth Management in Boston.
Further market gains were limited as Travelers Cos Inc
, Verizon Communications Inc and Johnson & Johnson
- all Dow components and bellwethers for their sectors -
tumbled following results.
Travelers fell 1.7 percent to $85 after posting a profit
that beat expectations, though investors worried about the
insurance provider's margins. Verizon lost 1.8 percent to $47.50
while J&J dropped 1.7 percent to $93.40 after it gave an outlook
at the low end of analyst expectations.
According to Thomson Reuters data through Friday, earnings
for the fourth quarter are expected to grow 7 percent over the
prior year. Of the 45 companies in the benchmark S&P index that
have reported, 49 percent topped analyst expectations, below
both the long-term average of 63 percent and the 66 percent
average over the past four quarters.
The Dow Jones industrial average was down 45.64
points, or 0.28 percent, at 16,412.92. The Standard & Poor's 500
Index was up 3.89 points, or 0.21 percent, at 1,842.59.
The Nasdaq Composite Index was up 21.59 points, or 0.51
percent, at 4,219.17.
As the Federal Reserve has embarked on its plan to reduce
economic stimulus, investors will closely monitor corporate
profits for signs of growth. About eight companies have issued
negative outlooks for every positive one, which would mark the
lowest ratio on record should it continue.
"Results are running light, and negative announcements have
been off the hook with very high levels of negative guidance,"
said Mortimer, who helps oversee about $185 billion in client
assets. "The market pays a premium for growth, and the stocks
that have rallied and then disappointed are susceptible to large
drops almost immediately."
U.S.-listed shares of BlackBery Ltd were the top
boost to the Nasdaq 100, jumping 8.5 percent to $9.86 as
short-sellers bailed out of the smartphone maker. The stock is
up about 33 percent in 2014.
Delta Air Lines Inc rose 3.4 percent to $32.14 after
it reported a higher-than-expected fourth-quarter profit, aided
by lower fuel costs.