NEW YORK (CNN/Money) -
U.S. stock markets closed higher Tuesday, with gains in technology propelling the major indexes, despite investor caution ahead of congressional testimony by Fed Chairman Alan Greenspan, due to begin Wednesday.
The Nasdaq composite (up 14.76 to 2075.33, Charts) gained around 0.7 percent, the Standard & Poor's 500 (up 5.73 to 1145.54, Charts) index gained around 0.5 percent and the Dow Jones industrial average (up 34.82 to 10613.85, Charts) added around 0.3 percent.
Treasury bond prices fell, as did the U.S. dollar versus other major currencies.
Stock gains Tuesday were minimal due to the lack of earnings news and anticipation about the economic news due later in the week.
"Earnings season is finished, and the economy is taking this one step forward, one step back path," said Ram Kolluri, chief investment officer at GlobalValue Investors. "I'm looking for us to be in a holding pattern at least through the rest of February."
Reports are due on Thursday and Friday on retail sales, consumer sentiment and business inventories, and that could stir some action in the market. In addition, Greenspan will deliver his semi-annual monetary policy report before the House Financial Services Committee Wednesday and the Senate Banking Committee Thursday. The speech tomorrow begins around 11 a.m. ET.
At the conclusion of its last interest rate policy-setting meeting in late January, the central bank released a statement that modestly changed the wording in the section regarding how long interest rates will remain low. The change inspired fear that rates would be raised sooner, sparking a large stock selloff.
"After Greenspan changed the language in the statement last time, there is some apprehension about what he'll say," said John Hughes, market analyst at Shields & Co.
Most of the companies in the S&P 500 have already reported quarterly results and the earnings have been predominantly upbeat. But investors are now looking forward to the first-quarter results and beyond.
"We've had a big stock run since hitting the lows last March," Kolluri added. "Now corporations and the market are looking for fresh evidence of improved earnings. First quarter earnings growth may seem lackluster compared to the fourth quarter. I think rather it will be the second-quarter earnings that impress."
Fourth-quarter earnings are forecast to have grown around 28 percent year-over-year. By comparison, First Call currently forecasts earnings growth of around 14 percent in the first quarter.
After the close Tuesday, Priceline.com (PCLN: Research, Estimates) reported earnings of six cents per share, reversing a loss from a year earlier and more than what analysts were expecting. The company also issued first quarter and second quarter forecasts that were largely in line with expectations.
Before the bell Wednesday, Dow component Coca-Cola (KO: down $0.23 to $52.17, Research, Estimates) is due to report results. The company is expected to have earned 44 cents per share, up from 40 cents a year earlier.
What's moving?
Juniper Networks (JNPR: up $1.18 to $27.36, Research, Estimates) rallied 4.5 percent and led the Nasdaq's most-actives list after the company said Monday it would buy security technology provider NetScreen Technologies (NSCN: up $1.62 to $37.56, Research, Estimates) for around $3.5 billion in stock, a move that analysts said showed the company was attempting to be competitive with Cisco Systems (CSCO: up $0.11 to $24.78, Research, Estimates). News of the deal had sent Juniper's stock down 11 percent and NetScreen up 36 percent Monday.
Singapore's ST Assembly Test Services (STTS: down $1.26 to $12.08, Research, Estimates) is buying a U.S. competitor, ChipPAC, for $1.2 billion in stock, making the combined company the world's third-largest chip assembler. Shares of ChipPAC (CHPC: up $1.09 to $8.99, Research, Estimates) rallied nearly 14 percent and placed third on the Nasdaq's most-actives list.
Media behemoth Walt Disney (DIS: up $0.31 to $24.08, Research, Estimates) rose 1.3 percent after the company's Board of Directors defended Chief Executive Michael Eisner against attacks lobbed by Roy Disney and another former Disney board member who have called for Eisner's removal.
Another media stock, Viacom (VIA.B: up $1.12 to $41.10, Research, Estimates), rose 2.8 percent after the company reported a quarterly loss and said it would spin off its Blockbuster (BBI: down $0.21 to $16.20, Research, Estimates) video holdings.
3M (MMM: up $1.86 to $81.25, Research, Estimates) rose 2.3 percent after the company said late Monday it was raising its quarterly dividend by 9.1 percent to 36 cents per share, due to the strength of its balance sheet.
A number of financial stocks were also active.
American depositary shares of Swiss bank UBS (UBS: up $2.30 to $77.33, Research, Estimates) rose more than 3 percent after the company reported strong earnings for 2003. Merrill Lynch (MER: up $0.47 to $58.20, Research, Estimates) edged up after the company said its board has approved a buyback of up to $2 billion of company stock. When corporations buy their stock back, the shares tend to rise, as the move is often viewed as a sign of corporate confidence.
Treasury prices fell. The 10-year note shed 13/32 of a point and its yield rose to 4.10 percent from 4.05 percent late Monday. The dollar weakened against the yen and traded near a one-month low against the euro.
Oil prices rallied after OPEC decided to cut excess crude production, and in a surprise move -- lowered output quotas by 1 million barrels a day effective April 1. NYMEX light sweet crude oil futures rallied $1.04 to settle at $33.87 a barrel. COMEX gold reversed course, turned lower and lost 40 cents to settle at $407 an ounce.
Market breadth was positive, on pretty light volume. Gainers outnumbered losers by close to two to one on the New York Stock Exchange, where 1.39 billion shares traded. On the Nasdaq, advancers topped decliners by more than five to three as 1.63 billion shares changed hands.
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