Stocks climbed higher on Tuesday as the second-quarter earnings season delighted investors, helping to build on gains from the prior session. The Dow Jones Industrial Average rose over 260 points, while the S&P 500 Index and Nasdaq Composite advanced 1.2% and 1.6%, respectively.
Here's how the market settled on Tuesday:
S&P 500 Index (NYSE: SPY): +1.20% or +59.95 points to 5,070.55
Dow Jones Industrial Average (NYSE: DIA): +0.69% or +263.71 points to 38,03.69
Nasdaq Composite Index (NASDAQ: QQQ): +1.59% or +245.34 points to 15,696.64
On the Earnings Front:
United Parcel Service (NYSE: UPS) shares rose after the delivery giant reported better-than-expected first-quarter profit on Tuesday as its cost cutting efforts helped offset waning demand. The company reported a 3.2% decline in average daily volumes in its U.S. business, as well as a 5.8% decrease for its international business, but UPS notes that volumes "showed improvement throughout the quarter."
General Motors (NYSE: GM) shares also rose higher after the automaker raised its full-year earnings outlook following its first-quarter earnings beat. The company now expects adjusted earnings between $9 to $10 per share on revenues of $12.5 billion to $14.5 billion, up from its previous forecast for $8.50 to %9.50 per share on revenue of $12 billion to $14 billion.
"Our consumer has been remarkably resilient in this period of higher interest rates," CFO Paul Jacobson said during the company's earnings call. "We think in this environment that we can continue to perform."
Spotify (NYSE: SPOT) shares also jumped higher after the audio streaming company beat Wall Street estimates for its first quarter and raised its monthly active user forecast for its current quarter. The company now expects net new MAUs of 16 million, which would bring its quarterly total of active users to 631 million.
PepsiCo (NASDAQ: PEP) also delivered strong earnings on Tuesday, despite weakening U.S. demand stemming from broad recalls and lower consumer demand amid rising prices. The company's food division saw volumes fall by 0.5% while its beverage division reported flat volume in the first three months of the year.
"As we look ahead, we continue to expect a normalization and moderation in category growth rates versus the last few years," Pepsi executives said in a statement. "We also continue to expect that consumer will remain watchful with their budgets and choiceful with their purchases."
JetBlue Airways (NASDAQ: JBLU) shares were under pressure on Tuesday after the budget airline lowered its full year guidance as it continues efforts to return to profitability. The company expects full-year 2024 sales to fall to the low single-digits and estimates sales to be flat.
"As we look to the full year, significant elevated capacity in our Latin [America] region, which represents a large portion of JetBlue's network, will likely continue to pressure revenue and we expect a setback in our expectations for the full year," CEO Joanna Geraghty said in an earnings release. "We have full confidence that continuing to take action on our refocused standalone strategy is the right path forward to ultimately return to profitability again."
Novartis (NYSE: NVS) shares rose after the pharmaceutical company raised its full-year guidance following its first-quarter earnings beat, with its net sales increasing 11% for the year as CEO Vas Narasimhan said the company saw solid growth across all of its major brands. The company expects 2024 net sales to rise by a high single- to low double-digit percentage.
In Economic News:
U.S. manufacturing and services activity reached multi-month lows in April, according to a reported on Tuesday, with both sectors showing contraction as a potential slowdown looms over the the economy.
The S&P Global Flash U.S. Composite PMI showed a 49.9 reading for manufacturing, down from 51.9 in March. For services, the index came in at 50.9, down from 51 last month. Both readings came in below Wall Street expectations and reading below the neutral level of 50 indicate contraction.
Beneath the headline, new orders also fell for the first time in six months. "Companies responded by scaling back employment for the first time in almost four years, with business confidence also wanning to the lowest since last November," the S&P report said.
New home sales rose in March at a faster-than-expected pace as mortgage rates declined, the Commerce Department reported Tuesday. Sales of single-family homes totaled 693,000 for the month, rising 8.8% month-over-month and coming in higher than February's downwardly revised print of 637,000. The median sales price also rose to $430,700, its highest level since August 2023, after falling at the start of the year.