* Dow Chemical jumps on Third Point stake
* Verizon, Travelers and J&J all fall after results
* IBM down, Cree rises in extended trading after results
* Dow off 0.3 pct, S&P up 0.3 pct, Nasdaq up 0.7 pct
By Ryan Vlastelica
NEW YORK, Jan 21 U.S. stocks mostly rose on
Tuesday, with the S&P 500 snapping a two-session decline as the
materials sector 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 0.6 percent as one of
the best performing major S&P indexes, led by a 6.6 percent gain
in Dow Chemical to $45.93. 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 6.8 percent to $12.13
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, advanced 0.5 percent.
"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.
The Dow fell as Travelers Cos Inc, Verizon
Communications Inc and Johnson & Johnson - all
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 1.3 percent to
$47.70, while J&J dropped 1.1 percent to $94.03 after it gave a
forecast at the low end of analyst expectations.
According to Thomson Reuters data, earnings for the fourth
quarter are expected to grow 7 percent over the prior year. Of
the 61 companies in the benchmark S&P index that have reported
so far, about 56 percent topped analyst expectations, below the
long-term average of 63 percent. About 71 percent have topped
revenue forecasts, above the long-term average of 61 percent.
The Dow Jones industrial average was down 44.12
points, or 0.27 percent, at 16,414.44. The Standard & Poor's 500
Index was up 5.10 points, or 0.28 percent, at 1,843.80.
The Nasdaq Composite Index was up 28.18 points, or 0.67
percent, at 4,225.76.
As the Federal Reserve has embarked on its plan to reduce
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."
International Business Machines Corp fell 3.4
percent to $182.01 in after-hours trading. The Dow component
reported adjusted fourth-quarter earnings that beat
expectations, but revenue was below consensus.
Texas Instruments Inc shares fell 1.3 percent to
$43.30 after the bell despite the company reporting
fourth-quarter revenue that beat expectations.
Advanced Micro Devices slumped 11.5 percent to $3.69
after the bell.
Cree Inc rose 4.2 percent after the market closed
after posting second-quarter revenue that topped expectations.
U.S.-listed shares of BlackBerry Ltd were the top
boost to the Nasdaq 100, jumping 9.4 percent to $9.93 as
short-sellers bailed out of the smartphone maker. The stock is
up about 33 percent in 2014.
Delta Air Lines Inc rose 3.3 percent to $32.08 after
it reported a higher-than-expected fourth-quarter profit, aided
by lower fuel costs.
About 63 percent of companies that trade on the New York
Stock Exchange closed higher while 59 percent of Nasdaq-listed
names ended in positive territory. About 6.78 billion shares
traded on all U.S. platforms, according to BATS exchange data.