Following gains to multi-year highs last week, the stock market today took a breather, after being closed Monday in observance of Martin Luther King Jr. Day.
In early afternoon trading, the Dow Jones Industrial Average tacked on 37 points. The benchmark hit its highest close since December 2007 last week.
Meanwhile, the Standard & Poor's 500 Index added 2, and the tech-heavy Nasdaq was lower by 5, as it awaits some key earnings reports after the close and later in the week.
Investors digested news Tuesday from the National Association of Realtors that showed sales of U.S. existing homes surprisingly dropped in December. The decline came as the number of homes on the market dipped to the lowest supply in more than a decade.
While purchases slumped 1% last month, the reading was still the second best since November 2009.
But it was earnings that got all the attention Tuesday.
Stock Market Today: Don't Miss These Headlines/Earnings
Helping move the Dow Jones Transportation Index sharply higher was Kansas City Southern's (NYSE: KSU) quarterly results of 92 cents per share, which handily beat Wall Street estimates by a dime.
Even better, the U.S.'s fourth-largest public railroad operator gave upbeat projections for the remainder of 2013.
As a rule, KSU is deemed to be in a better position than most railroads thanks to its cross-border trade. Others in the industry have suffered of late due to a slump in coal shipments as a warm winter, until now, has enveloped much of the country. Low natural gas prices also haven't helped.
Looking ahead, KSU is counting on four new auto factories in Mexico to lift volume. The Central American country accounts for some 45% of KSU's total revenue. Shares jumped nearly 4% in afternoon trading, reaching an all-time high of $92.05 intraday.
Shares of E I Du Pont De Nemours And Co (NYSE: DD) advanced nearly 2% after the chemical and bioscience company reported earnings of 12 cents, a nickel ahead of Wall Street estimates, and revenue of $7.3 billion, beating forecasts of $7.2 billion.
Drug giant Johnson & Johnson (NYSE: JNJ) saw shares slip nearly 1% after its 2013 profit forecast, in the range of $5.35 to $5.45 per share, was shy of analysts' estimates of $5.49. It did however report higher quarterly profits thanks to higher sales. The New Brunswick, NJ-based company was pleased with the numbers.
"Our results included strong growth of key products, successful new product launches and the addition of Synthes (an orthopedic business J&J acquired in June 2012)," CEO Alex Gorski said in a statement. "We continued to make important investments building strategic partnerships and in advancing our pipeline, which positions us well for delivering sustainable growth."
Verizon Communications Inc. (NYSE: VZ) reported Q4 2012 adjusted earnings of 45 cents a share, below the consensus of 54 cents and lower than the 52 cents reported in the same period a year ago.
Yet shares of the largest U.S. mobile service provider managed to eke out a small gain after the company and a bevy of analysts attributed the miss to charges related to Hurricane Sandy.
Social networking behemoth Facebook Inc. (Nasdaq: FB) soared more than 4% after a handful of analysts have turned bullish on the company ahead of earnings, to be reported Jan. 30 after the close.
Recently, Bank of America's Merrill Lynch arm made a gutsy projection saying FB's mobile revenue will surpass desktop revenue come 2014, and will propel growth. In addition, JPMorgan Chase & Co. just raised its price target from $29 to $35.
After the close, look for earnings from search giant Google Inc. (Nasdaq: GOOG). Everyone is waiting to hear if Google will address last week's announcement from Facebook of its new "Graph Search." Estimates are for Google to report earnings of $10.57, up from $9.50 a year earlier.
International Business Machines Corp. (NYSE: IBM) also reports after the bell. Forecasts are for the tech heavyweight to report earnings of $5.25 a share, better than the $4.71 logged in the same period a year ago.
The tech earnings parade continues on Wednesday with numbers from the world's most valuable company Apple Inc. (Nasdaq: AAPL). Microsoft Corp. (Nasdaq: MSFT) reports Thursday. Both are expected to report earnings that are weaker than those reported a year ago.
Related Articles and News:
- Money Morning:
For Gold Prices, All Signs Point One Way
- Money Morning:
2013 IPO Calendar: Who to Watch
- The Wall Street Journal:
Tech Pulls Down Nasdaq
- Bloomberg News:
Sales of U.S. Existing Home Sales Decrease on Lack of Supply
Kansas City Southern profit beats estimates, shares tough life high