Stocks gain on earnings; fake tweet shakes market
NEW YORK — Companies that do the best when the economy is improving led the market higher Tuesday after several of them reported strong quarterly earnings.
Coach, a maker of luxury handbags, and Netflix, which streams TV shows and movies over the Internet, were winners after announcing profits that impressed investors. Financial stocks rose after Travelers’ earnings beat the expectations of financial analysts who follow the company.
That’s a change from earlier this year. The stock market’s surge in 2013 has been led by so-called defensive industries such as health care, consumer staples and utilities. Investors buy those stocks when they’re unsure about the direction of the economy and want to own companies that make products people buy in bad times as well as good. Until now, they’ve been less enthusiastic about stocks of companies that provide discretionary goods and services and do best in good times.
The Dow Jones industrial average and the Standard & Poor’s 500 index both rose 1 percent, and for a third straight day.
Stocks closed higher even after financial markets were shaken in the early afternoon when a fake tweet on The Associated Press Twitter account prompted a sudden sell-off.
A posting saying there had been explosions at the White House and President Barack Obama had been injured was sent at 1:08 p.m. Eastern time. The Dow plunged 143 points, from 14,697 to 14,554, over the next two minutes. The AP put out a statement at 1:12 p.m. saying its Twitter account had been hacked and the posting was fake. By 1:19 p.m. the index had recovered all of its losses.
AP spokesman Paul Colford said the news cooperative is working with Twitter to investigate the issue. The AP disabled its other Twitter accounts following the attack, Colford added.
The Dow closed up 152.29 points at 14,719.46. The S&P 500 ended 16.28 points higher at 1,578.78. The Nasdaq composite rose 35.78 points, or 1 percent, to 3,269.33.