Stocks rebound after fake tweet spooks investors
NEW YORK (CNNMoney) — After briefly tanking thanks to a fake Associated Press tweet saying there were explosions at the White House, stocks managed to end the session higher Tuesday.
The AP said its Twitter account was hacked and stocks quickly bounced back. Meanwhile, strong earnings and a positive reading on the housing market overshadowed gloomy news about the pace of global growth.
The Dow Jones industrial average, the S&P 500 and the tech-heavy Nasdaq closed 1% higher.
Shares of heavily shorted Netflix surged 24% Tuesday, after the streaming video service reported strong subscriber gains on Monday.
Travelers Companies helped lift the Dow, with shares climbing more than 2% after the insurer reported a rise in profits.
Shares of Coach jumped 10% after the upscale retailer posted better-than-expected sales and earnings.
Airlines have been on the news this week due to concerns about flight delays at airports resulting from the federal government’s forced budget cuts. But Delta Air Lines Inc and US Airways shares rose more than 4% after both airlines reported first-quarter profits.
Apple’s day of reckoning: After the bell, Apple reported earnings that beat expectations, raised its quarterly dividend by 15% and boosted its stock buyback program. Investors welcomed the results, and shares of the tech giant jumped 5% in after hours trading.
AT&T also reported results in the afternoon. Earnings were in line with estimates, but revenue missed forecasts. Shares of AT& fell in after hours trading. Analysts will also be keeping an eye on iPhone sales. Last week, Verizon reported that iPhone sales tumbled 33% in the first quarter from the fourth quarter of 2012.
Eyes on the economy: Earnings have been in focus this week as investors grasp any good news they can, but that doesn’t mean economic concerns have disappeared, said Russ Koesterich, global chief investment strategist at BlackRock.
Markets suffered their worst week of the year last week thanks to tepid economic data, and there hasn’t been any major indication of improvement since then. Koesterich expects the economy to show even more signs of slowing this spring as higher taxes and budget cuts, the so-called sequester, drag on consumer spending.
Investors were greeted with a little bit of good housing market news on Tuesday, however. The Census Bureau said new home sales rose 1.5% in March to an annual rate of 417,000, just above economists’ forecasts. The report boosted shares of several home builders, including Lennar Corp., PulteGroup and Toll Brothers.
Overseas, weak data on manufacturing in China weighed on shares in Shanghai. The Hang Seng declined 1.1%. The Shanghai Composite was hardest hit by the factory report, falling 2.6%. Japan’s Nikkei lost 0.3%.
European markets closed higher, recovering from an earlier slump. Germany’s DAX, London’s FTSE 100 and France’s CAC 40 all posted solid gains despite a report showing that private sector output in Germany fell for the first time since November.
The dollar rose against the euro, the British pound and the Japanese yen.
Oil prices were slightly higher, and gold prices were lower.
The price on the 10-year Treasury edged lower, pushing the yield up to 1.70% from 1.69% late Monday.