Wall Street higher as Merck, Sprint shares gain on results
NEW YORK (Reuters) - U.S. stocks rose on Tuesday following better-than-expected earnings from Merck & Co and Sprint Corp.
The Dow Jones industrial average was outperforming the broader market as component Merck & Co's shares jumped nearly 3 percent to $58.42 after its earnings report.
Britain's Reckitt Benckiser Group Plc confirmed talks to buy Merck's consumer health business, the latest asset up for grabs in a wave of recent pharmaceutical deals.
On the S&P, energy and financial stocks were among the top gainers, with the energy sector up 1.2 percent and the financial sector up 0.9 percent.
Sprint Corp. shares jumped nearly 7 percent to $7.92 after the No. 3 U.S. mobile provider reported an increase in quarterly revenue, as expected, due to a new billing plan that lowered wireless expenses.
Twitter is due to report after the market closes Tuesday.
But Coach Inc., reported a sharp drop in North American sales as the upscale leather goods maker continued to lose ground to fast-growing rivals in the U.S. handbags market. The stock slumped more than 8 percent to $45.96 and weighed on the S&P retail sector which fell 0.6 percent.
Archer Daniels Midland Co. shares fell 3.3 percent to $42.94 after its first-quarter profit and sales missed Wall Street estimates.
"The market has grown more volatile, in a sense that it reacts more to daily news like the earnings. In general, the market is trying to figure out a level that investors are comfortable with and that is why we are seeing big daily swings recently," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
The Dow Jones industrial average rose 91.41 points, or 0.56 percent, to 16,540.15, the S&P 500 gained 8.63 points, or 0.46 percent, to 1,878.06 and the Nasdaq Composite added 16.315 points, or 0.4 percent, to 4,090.716.
The Fed starts a two-day policy meeting on Tuesday and is expected to again scale back its monthly bond purchase program and provide guidance on when it might raise interest rates.
The European Union imposed asset freezes and travel bans on 15 Russians and Ukrainians, including a Russian deputy prime minister, Dmitry Nikolayevich Kozak, over Moscow's action in Ukraine, but steered clear of sanctions on business leaders.