U.S. shares rebound; oil pares gains after Iran ship seizure
By Sam Forgione
NEW YORK (Reuters) - Two of three major U.S. stock indexes rose modestly on Tuesday as Merck posted strong earnings and IBM raised its dividend, while European stocks slid on weak corporate results and oil prices were flat to lower on expectations that U.S. crude stockpiles have reached record highs.
Merck shares jumped more than 5 percent after the U.S. drugmaker beat quarterly earnings estimates. IBM shares rose 1.9 percent and were the biggest positive influence on the Dow after the company hiked its quarterly dividend by 18 percent. Losses in Apple shares weighed on the Nasdaq.
Data showing U.S. single-family home prices rose more than expected in February contributed to the afternoon rebound, although the data was released earlier in the session when some weak corporate results depressed U.S. shares.
"The market, in between the earnings reports, is still always looking at the macro trends," said Margaret Patel, senior portfolio manager at Wells Capital Management in Boston. "The housing numbers were very positive for the economy."
In Europe, however, disappointing corporate earnings handed shares their biggest daily decline in over a week, with paper maker UPM-Kymmene slipping after results while a new share issue hit Commerzbank.
Oil prices seesawed as traders weighed security scares in the Middle East and support from a weak dollar against expectations that U.S. crude stockpiles have reached record highs.
Iranian forces boarded a Marshall Islands-flagged cargo ship in the Gulf on Tuesday, the Pentagon said, an event which spurred a brief rally in oil prices.
"Tensions are so high in that region with the impending Iran-U.S. nuclear deal that any event implied to be U.S.-linked has an immediate effect on oil prices," said John Kilduff, partner at New York energy hedge fund Again Capital. Continued...