Dow, S&P Close Down on Earnings; biotech boosts Nasdaq for second day of gains

US stock markets ended mixed on Tuesday, failing to maintain Monday’s momentum as investors reacted to earnings reports from individual major companies.

“I think investors are conflicted with a better earnings picture on the earnings side, a slightly weaker earnings picture, and no hard economic data to shake it up,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “We don’t have enough energy to break new heights.”

Stocks opened higher but soon fell. The Dow Jones Industrial Average briefly fell more than 100 points in afternoon trading, weighted by Travelers (TRV)‘ missed both the top and bottom lines, currency headwinds on DuPont earnings and a continued decline in IBM revenue. The S&P 500 also fell into negative territory, with energy and utilities lagging.

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The Nasdaq closed up 0.40 percent, marking a second straight day of gains. Facebook (FULL BOARD) extended gains of about 1 percent ahead of an earnings report Wednesday after the bell. iShares Nasdaq Biotech ETF (IBB) (IBB) increased by almost 2 percent.

“This type of bifurcation is extremely healthy,” said Art Hogan, chief market strategist at Wunderlich Securities. “What does this tell us? People buy shares. They don’t buy the markets.”

When the major averages move together, it tends to indicate risk-on or risk-off investing, Hogan said.

Healthcare was the leader of the S&P 500 index. In subsequent mergers and acquisitions in this sector, generic drug maker Teva (Tel Aviv Stock Exchange: TEVA-IL) he announced Offer for $82 per share for Mylan (MYL) on Monday.

The main indices were little changed from their levels a month ago.

This points to resistance at higher levels and “some distribution,” according to Peter Cardillo, chief market economist at Rockwell Global Capital.

Company reports are ambiguous, as analysts claim that the tendency of companies to achieve better financial results with lower revenues is negative in the long run.

“I think the trend is clear. The strong dollar and moderate global growth are having an impact,” said Peter Boockvar, chief market analyst at The Lindsey Group.

DuPont (DD) it earned an adjusted $1.34 per share for the first quarter, 5 cents above estimates, although revenue was below forecasts. DuPont said quarterly results were negatively impacted by 25 cents due to a stronger dollar. Additionally, DuPont also announced an increase in its quarterly dividend by 4 percent to 59 cents per share.

United Technologies (UTX) beat estimates by 13 cents with adjusted quarterly earnings of $1.58 per share and revenue slightly below forecasts. UTC said it had started the year well despite continued currency headwinds.

Kimberly-Clark (KMB-) reported adjusted quarterly earnings of $1.42 per share, 9 cents above estimates, with revenue also above forecasts. The personal care products maker also warned that currency effects would reduce its 2015 operating profit by 10 to 11 percent.

Verizon (VZ) beat forecasts by 7 cents with quarterly earnings of $1.02 per share, although revenue was slightly lower. Verizon’s wireless business also added 565,000 subscribers in the quarter from a year earlier.

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IBM (IBM) reported adjusted quarterly profit of $2.91 per share, 11 cents above estimates. Revenue was broadly in line with estimates, although it fell for the 12th consecutive month as IBM continues its transformation toward a cloud-based business.

Hormel (HRC) said its turkey supply chain had been significantly disrupted due to the bird flu outbreak in Minnesota and Wisconsin. Hormel maintained its previous fiscal 2015 profit guidance but said it expected results at the low end of the guidance range.

Amgen (AMGN)Yahoo (YHOO)Chipotle Mexican Grill (CMG)Discover finance (DFS)Illumination (ILMN)Yum Marki (PRIDE)Cree (CREE)me a robot (IRBT) report after the gong.

Crude oil continued to trade near highs amid the expiration of futures contracts on Tuesday afternoon and lingering concerns about tensions in Yemen. Crude oil futures ended the day down $1.12, or 1.99%, to $55.26 a barrel on the New York Mercantile Exchange. Brent crude was trading near $62 per barrel.

May WTI futures roll over to June at approximately 3:00 PM EST.

This Dow Jones Industrial Average (Dow Jones Global Indices: .DJI) closed up 85.34 points, or 0.47 percent, at 17,949.59 led by Cisco (CSCO) and visa (NYSE:V) leading progressives and travelers (TRV) and DuPont (DD) the biggest laggards.

This S&P500 (^GSPC) closed down 3.11 points, or 0.15 percent, at 2,097.29, with the energy sector the biggest of the seven laggards and the healthcare sector leading the gains.

The Nasdaq (^IXIK) closed up 19.50, or 0.39 percent, at 5014.10.

Rising stocks outpaced decliners on the New York Stock Exchange, with trading volume at 677 million and total volume at 3.2 billion as of 4:05 p.m.

Gold futures settled at $9.40, or $1,203.10 per ounce.

Yield on 10-year US Treasury bonds (USB) rose slightly to 1.91 percent. The U.S. dollar remained stable against major world currencies, while the euro topped $1.07.

This CBOE Volatility Index (VIX) (^VIX)widely considered the best gauge of fear in the market, was trading around 13.

The U.S. stock market closed higher on Monday after China’s central bank announced unexpected stimulus measures.

New York Fed President William Dudley on Monday reiterated cautious optimism about U.S. economic growth and said the central bank would remain data-driven. But he expects inflation to strengthen and hopes to tighten policy later this year.

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“Dudley’s speech yesterday morning sort of set the tone for the week,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “Investors believe the Fed will remain very accommodative. It may be a ‘one-off’ decision (an interest rate increase).”

Asian and European markets rose on Tuesday as investors react to the plethora of company performance reports.

–Reuters and CNBC’s Peter Schacknow contributed to this report

This week on offer:

Tuesday

Earnings: Amgen, Yahoo, Broadcom, Chipotle Mexican Grill, Discover Fincl., Intuitive Surgical, Stryker, VMWare, Yum Brands

Wednesday

Revenues: Boeing, Coca-Cola, McDonald’s, AT&T, Facebook, eBay, Petrobras, Qualcomm, F5 Networks, Six Flags, Ryder System, Angie’s List, T. Rowe Price, Abbott Labs, EMC, Bank of NY Mellon, St. Jude Medical, DR Horton, Texas Instruments, Cheesecake Factory, Xilinx, SLM, Raymond James

9:00 a.m.: FHFA home prices

10:00: Existing homes for sale

Thursday

Revenues: 3M, Amazon.com, Google, Microsoft, Altria, Caterpillar, Dow Chemical, General Motors, Pepsico, Procter and Gamble, Novartis, Eli Lilly, Union Pacific, Hershey, Freeport-McMoRan, KKR, Domino’s Pizza, Johnson Controls, PulteGroup, Dunkin Brands, Raytheon, Starbucks, Capital One, Juniper Networks, Newmont Mining, Southwest Airlines, Pandora

8:30: Preliminary claims

9:45: PMI for manufacturing

10:00 AM: New Home Sales

Friday

Earnings: Biogen, AstraZeneca, American Airlines Group, Cabot Oil and Gas, State Street, Xerox, AO Smith, Tyco

8:30: Durable goods

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