Created on Tuesday, 21 May 2013 Written by THE ASSOCIATED PRESS
NEW YORK (AP) — The stock market turned higher Tuesday as investors banked on continued policy support from the Federal Reserve. Two big retailers also topped Wall Street expectations for the most recent quarter.
The Dow Jones industrial average rose 64 points to 15,399 shortly after 1 p.m. Eastern time, though trading volume was light.
"I think a lot of people are sitting on their hands waiting to see what the Fed says tomorrow," said Michael Binger, senior portfolio manager at Gradient Investments in Minneapolis, Minn.
On Wednesday, the Federal Reserve will release minutes from its most recent policy meeting and Chairman Ben Bernanke will go before Congress to discuss his outlook for the U.S. economy.
Investors are looking for any hints that the Fed will ease back on its multibillion dollar bond-buying program, which has helped lift the stock market to all-time highs.
Stock indexes had wobbled between gains and losses in early trading, then took a turn higher after James Bullard, head of the Fed's St. Louis branch, said the Fed should keep buying bonds to energize the economic recovery.
The Standard & Poor's 500 index gained six points to 1,672. The Nasdaq composite rose 11 points to 3,507.
J.P. Morgan Chase & Co. gained 2 percent. Shareholders of the country's biggest bank voted to allow Jamie Dimon to keep his two titles, CEO and chairman of the board. Some had sought to split the positions, a movement which gained momentum after massive losses tied to a single trader in London.
The bank's stock rose $1 to $53.29.
Home Depot surged 3 percent, the best gain among the Dow's 30 stocks. The retailer reported an 18 percent increase in quarterly income as the housing market continued to recover. Home Depot rose $2.18 to $78.93.
It's been another solid earnings season for big companies, with corporate profits hitting all-time highs even as revenues barely rise.
Seven of every 10 companies in the S&P 500 have trumped Wall Street's earnings expectations, according to S&P Capital IQ. First-quarter earnings are on track to climb 5 percent over the year before. Revenue is expected to rise just 1 percent.
In the market for U.S. government bonds, the yield on the 10-year Treasury note slipped to 1.93 percent from 1.96 percent late Monday.
In commodities trading, the price of gold fell $7 to $1,377. Gold has slumped 19 percent this year. Tame inflation, a stronger dollar and a surging stock market have made gold less appealing as an alternative investment.
Among other companies in the news:
— Carnival Corp slumped 5 percent, the biggest drop on the S&P 500. The cruise-ship operator cut its earnings forecasts for the year late Monday as it wrestles with the fallout from high-profile incidents in which passengers have been stranded at sea. Carnival's stock lost $1.92 to $33.40.
— Best Buy dropped 4 percent, after reporting a quarterly loss and sales that fell short of expectations. Its stock lost $1.16 to $25.65.
— TiVo gained 3 percent, or 44 cents, to $13.10. The digital video recording company narrowed its quarterly loss with the help of higher sales from more subscribers.