Blue Chips Boosted by Strong Earnings, IBM Dividend Hike


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The Dow posted solid gains on Tuesday after AT&T and 3M reported better-than-expected first-quarter results and IBM boosted its dividend.

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Today's Markets

As of 3:25 p.m. ET, the Dow Jones Industrial Average rose 77.3 points, or 0.6%, to 13004, the S&P 500 gained 4.3 points, or 0.31%, to 1371 and the Nasdaq Composite dipped 12.2 points, or 0.41%, to 2958.

While traders were keeping an eye on Europe on Tuesday following a steep loss in the prior session, attention is shifting back to the U.S., with a slew of earnings and data on the docket.

Results released by three blue chips were generally seen as solid, as has been a trend so far during the first-quarter earnings season.

"A majority of companies are surpassing expectations handily," said Lawrence Creatura, a portfolio manager at Federated Investors, which manages $370 billion in assets. Creatura said the "bar was set too low" across the board, but "a broad menu of concerns" may keep analysts from raising it markedly in the current quarter.

3M (NYSE:MMM) revealed first-quarter earnings of $1.59 a share on revenue of $7.5 billion, beating expectations of $1.49 a share on $7.49 billion. The Dow component also boosted the lower end of its full-year earnings forecast by ten cents.

AT&T (NYSE:T) posted a first-quarter profit of 60 cents a share on sales of $31.8 billion. Analysts expected the telecommunications giant to earn 57 cents on $31.85 billion.

United Technologies (NYSE:UTX) unveiled earnings on continuing operations of $1.31 a share, besting expectations of $1.20. However, the diversified manufacturer's sales came in at $12.42 billion, weaker than the $12.71 billion expected.

IBM (NYSE:IBM) also boosted its dividend by a dime to 85. Big Blue's board also authorized $7 billion to use for a stock buyback.

Apple (NASDAQ:AAPL), the world's biggest company by market capitalization, is set to report after the closing bell.

Market participants also had a deluge of data to parse through.

Sales of new, single-family homes fell to 328,000 in March from a sharply upwardly revised 353,000 the month before, according to a report by the Commerce Department. Economists expected a rise to 320,000 from an initially reported 313,000.

Home prices in 20 major metropolitan areas fell 0.8% in February, on a non-seasonally-adjusted basis, according to a report by S&P/Case-Shiller. Prices fell 3.5% from the same month in 2011, a slightly bigger drop than the 3.4% expected.

The housing market has struggled to recover after getting pummeled during the economic downturn as demand has remained tepid, supply has remained high and credit conditions have remained tight.

Also on the economic front, the Conference Board's consumer confidence gauge fell to 69.2 in April from a downwardly revised 69.5 in March. The reading was expected to fall to 69.7 from an initally reported 70.2. The Federal Reserve also begins its two-day policy meeting on the day, with a statement expected on Wednesday.

Elsewhere, commodities were mixed. Crude oil traded in New York rose 44 cents, or 0.43%, to $103.55 a barrel. Wholesale New York Harbor gasoline slipped 0.88% to $3.16 a gallon.

In metals, gold climbed $11.20, or 0.69%, to $1,643 a troy ounce.

Foreign Markets 

European blue chips surged 1.8%, the English FTSE 100 gained 0.78% to 5666 and the German DAX rallied 1% to 6590.

In Asia, the Japanese Nikkei 225 fell 0.78% to 9468 and the Chinese Hang Seng rose 0.26% to 20677.

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