U.S. stock indexes wiped away early losses to show gains on a choppy trading day on Tuesday ahead of the Federal Reserve's two-day policy meeting. The move higher comes after the Dow had dropped by more than 100 points, on the heels of a batch of disappointing reading on home prices and consumer confidence data, only to bounce back in midafternoon trading. The S&P 500 SPX, +0.30% was trading higher by about 4 points, or 0.2%, to 2,112.59. The Dow Jones Industrial Average DJIA, +0.41% which had dropped by as much as 120 points in early trading in New York, was up 53 points, or 0.3% higher, at 18,091.95. The Nasdaq Composite COMP, +0.16% was about flat at 5,063.97. U.S. stocks fell Monday, with the Nasdaq Composite snapping a five-session winning streak as the biotechnology sector posted steep losses Photo: Applied Materials "Colin Cieszynski, chief market strategists at CMC Markets, blamed worse-than-expected earnings from companies such as Ford and Whirlpool on selling pressure. "It appears that consumers are not spending on big-ticket items, while confidence also dropped. In the next month or so, if we do not see improved economic numbers, markets might see a deeper correction, as a lot of investors had been expecting consumer spending to pick up," Cieszynski said. A recent run-up in stocks and corresponding high valuation might have convinced people to lock in profits. "With the strength in equities of late, investors are looking for any excuse to lock in some profits and Fed meetings tend to provide a prompt," said Mike McCudden, head of derivatives at stockbroker Interactive Investor, in a note. The Federal Reserve Open Market Committee meeting kicks off on Tuesday, but the interest-rate statement isn't released until Wednesday afternoon at 2 p.m. Eastern Time. Investors will be looking for clues as to whether a near-term rate hike is still in play, although a large majority of Fed watchers don't think the central bank will provide any hints, preferring to keep all options on the table. For the discussion on Wednesday, the FOMC will have the first-quarter GDP number to include in their assessment of the economy and interest rates. Tuesday's data: Consumers confidence fell in April, reflecting a slowdown in hiring and dimmer expectations about economic growth in the months ahead. U.S. house prices picked up in February, rising 0.5%, according to the S&P/Case-Shiller 20-city composite index released Tuesday. Compared with February 2014, prices for the 20-city index were up 5% — the fastest growth in half a year. Earnings: Reporting ahead of the bell, Ford Motor Co. F, -0.50% said profit was down 7% in the first quarter as profitability in North America and Asia was offset by losses in Europe and South America. Shares were little-changed. Drug maker Pfizer Inc. PFE, -0.82% reported a slight rise in first-quarter profit, but trimmed its full-year outlook. Shares climbed 0.5%. Another drug maker, Merck & Co. Inc. MRK, +5.43% put on 5.1% after raising its earnings guidance for the full year despite the negative impact of the stronger dollar. Shares of Coach Inc. COH, -6.90% slumped 7.9% after the luxury-goods retailer topped fiscal third-quarter profit expectations, but missed on sales. Shares of Whirlpool Corp. WHR, -6.10% dropped 6.4% after the home-appliances maker cut its full-year earnings guidance. Apple earnings: After Monday's closing bell, tech giant Apple AAPL, -0.23% posted a 33% rise in quarterly profit, boosted by a surge in iPhone sales and solid growth in China. Apple also raised its dividend, by 11%, and its share-repurchase program by $50 billion, to $140 billion. Shares, however, fell 1.2%. Read: How to play Apple stock after the earnings call Morgan Stanley lifted its price target on Apple to $166 from $160 and said the company is among its "best idea" stocks. Other markets: European stock markets SXXP, -1.49% were lower, with investors there also taking a cautious stance ahead of the Fed meeting. Asia stocks closed mixed, with Japanese shares NIK, +0.38% shrugging off a sovereign credit downgrade by Fitch Ratings. Metals dropped across the board, and so did energy prices. The dollar DXY, -0.81% was mostly lower against other major currencies. Source: MarketWatch
