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Overnight Markets: S&P 500 gains on global outlook

by Himanshu Singh on Jan 22, 2014 at 03:50

Overnight Markets: S&P 500 gains on global outlook

Wall Street mostly advanced on Tuesday, with the S&P 500 rising for the first time in three days, as optimism global economic growth is accelerating offset disappointing company earnings.

The Dow Jones industrial average was down 44 points, or 0.27%, at 16,414. The Standard & Poor's 500 Index was up five points, or 0.28%, at 1,844. The Nasdaq Composite Index was up 28 points, or 0.67%, at 4,226.

The International Monetary Fund raised its forecast for global growth this year as expansion in the economies of the US and the UK quicken. The global economy will expand 3.7% this year, compared with an October estimate of 3.6%, the IMF said in revisions to its World Economic Outlook released in Washington today.

Materials sectors rose, led by a 6.6% gain in Dow Chemical (DOW.N) after activist investor and hedge fund manager Daniel Loeb acquired a stake in the company and wanted it to spin off its petrochemical arm.

Alcoa Inc (AA.N) surged 6.8% following an upgrade to "overweight" from JP Morgan. The firm also lifted its price target on the aluminum company to $15 from $9.

The Dow fell as Travelers Cos Inc (TRV.N), Verizon Communications Inc (VZ.N) and Johnson & Johnson (JNJ.N) - all bellwethers for their sectors - tumbled following results. Travelers fell 1.7% after posting a profit that beat expectations, though investors worried about the insurance provider's margins.

Verizon lost 1.3%, while J&J dropped 1.1% after it gave a forecast at the low end of analyst expectations.

International Business Machines Corp (IBM.N) declined 3.4% in after-hours trading after it reported adjusted fourth-quarter earnings that beat expectations, but revenue was below consensus.

Texas Instruments Inc (TXN.O) shares fell 1.3% after the bell despite the company reporting fourth-quarter revenue that beat expectations.

Advanced Micro Devices (AMD.N) slumped 11.5% after the bell. Cree Inc (CREE.O) rose 4.2% after the market closed after posting second-quarter revenue that topped expectations.

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