Market Wrap for Tuesday, January 29: Dow and S&P Record Solid Gains, Nasdaq Lags

The U.S. stock market closed Tuesday's trading session mixed with the Dow and S&P recording solid gains and the Nasdaq finishing close to unchanged.

Despite a steep decline in consumer confidence, investors snapped up stocks throughout the day as the major averages closed near session highs. The energy sector was the top performer, gaining around 1.30 percent.

Other strong sectors included basic materials, consumer staples, and healthcare. The Nasdaq was held back by the tech sector which was only up 0.05 percent.

Major Averages

The Dow Jones Industrial Average rose more than 72 points, or 0.52 percent, to close at 13,954.

The S&P 500 added a little less than 8 points, or 0.51 percent, to 1,508.

The Nasdaq finished the day with a loss of under 1 point, or 0.02 percent, to just below 3,154.

Consumer Confidence

Consumer confidence fell sharply in January to record its lowest reading since November 2011. The index fell from an upwardly revised 66.7 in December to 58.6 in January. This was well below consensus estimates calling for a decline to just 65.7.

Despite a strong stock market, consumer confidence has been hit by gridlock in Washington D.C., concerns over the debt ceiling, and the end of the payroll tax holiday.

Commodities

Crude oil was higher on Tuesday and prices are pushing towards the $100 level again. NYMEX crude futures, the U.S. benchmark, were last up around 1 percent to $97.42. Brent crude contracts were trading 0.59 percent higher to $114.15.

Natural gas added to losses on Monday and was last trading down around two percent to $3.23.

Precious metals gained on Tuesday with COMEX gold futures adding 0.59 percent to $1,665. At last check, silver futures were up more than two percent to $31.43. Copper had climbed a little less than one percent on the day.

In the agricultural complex, corn was close to unchanged while wheat had lost 0.29 percent. Movers in soft commodities included sugar, which lost almost 2 percent, and cocoa and cotton which were up 1.57 percent and 1.65 percent, respectively.

Bonds

Late in the trading day, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) had lost around 0.50 percent to $117.03. The decline in bond prices pushed yields higher.

The 2-Year Note yield held steady at 0.28 percent while the 5-Year rose by one basis point to 0.88 percent. The 10-Year Note and 30-Year Bond yields both rose by three basis points to 1.99 percent and 3.17 percent, respectively.

Currencies

The U.S. dollar was weaker on the day with the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, trading down 0.32 percent heading into the close.

The closely watched EUR/USD pair had risen 0.29 percent to $1.3487. Other movers included the GBP/USD which was up 0.41 percent and the AUD/USD which climbed 0.53 percent on the day.

Volatility and Volume

The VIX was lower on Tuesday as the stock market had another good day. The widely watched volatility index declined a little less than two percent to 13.31.

Volume was light once again on Tuesday as investors seem content to hold onto positions in a low-volatility, rising market. Around 97.7 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands compared to a 3-month daily average of 137.7 million.

Stock Movers

Facebook (NASDAQ:FB) lost around five percent Tuesday ahead of the company's earnings report scheduled for after the closing bell on Wednesday.

Lexmark (NYSE:LXK) plummeted 15 percent after the disappointing Q4 results and weak Q1 guidance.

Amazon (NASDAQ:AMZN) lost around six percent ahead of a scheduled earnings report after the closing bell.

Homebuilders D.R. Horton (NYSE:DHI) and Beazer Homes (NYSE:BZH) both surged after earnings reports. D.R. Horton shares added almost 12 percent on the day while Beazer rose a little less than six percent.

Valero's (NYSE:VLO) earnings triggered a rally in the refining sector with the stock closing up almost 13 percent. A handful of rival refiners also posted strong gains on the session.

Ford (NYSE:F) lost almost 5 percent after its Q4 earnings results.

Hess (NYSE:HES) surged nine percent on Tuesday after hedge fund Elliott Management confirmed it is seeking five seats on the company's board. The fund is pushing for Hess to spin-off its assets in the Bakken Shale and split itself into three parts.

J.C. Penney (NYSE:JCP) jumped more than nine percent after saying it plans to re-implement more sales promotions. The move is an about face for CEO Ron Johnson who had previously put into place a no-discounts policy that has largely failed.

Cloud-computing stock VMware (NYSE:VMW) fell more than 21 percent after releasing its quarterly results on Monday after the market close.

Hard-drive maker Seagate Technology (NASDAQ:STX) lost more than nine percent after its quarterly earnings report.

Online game-maker Zynga (NASDAQ:ZNGA) fell around 8.50 percent a day after staging a large rally.

After jumping more than 70 percent on Monday, shares of Keryx Biopharmaceuticals (NASDAQ:KERX) climbed over 37 percent on Tuesday. The catalyst for the move was the release of positive data from the company's Phase III trial of its hyperphosphatemia drug Zerenex.