* Obama to focus on economy in State of the Union address
* Avon Products soars after results, housing also higher
* Coca-Cola weighs on Dow after revenue misses forecasts
* Dow up 0.4 pct, S&P up 0.2 pct, Nasdaq off 0.1 pct
By Ryan Vlastelica
NEW YORK, Feb 12 U.S. stocks closed modestly
higher on Tuesday, putting the Dow within striking distance of
an all-time high, as investors looked ahead to President Barack
Obama's State of the Union address.
Investors will be listening to Obama's speech for any clues
on a deal with Republicans to avert automatic spending cuts due
to take effect March 1. The tone of the speech will also be
scrutinized, with any sign of compromise likely to be warmly
The S&P 500 has risen for the past six weeks, putting it up
6.5 percent so far this year, while the Dow is about 1 percent
away from its all-time closing record of 14,164.53, reached in
But gains have been harder to come by since the S&P hit a
five-year high on Feb. 1. Daily moves have been small and
trading volume light as investors search for new reasons to
drive stocks higher.
About 5.73 billion shares changed hands on the New York
Stock Exchange, the Nasdaq and NYSE MKT on Tuesday, below the
daily average so far this year of about 6.48 billion shares.
"We're likely to settle in for a period and digest the gains
we've had, though there's still a bias towards positive
momentum," said Eric Teal, chief investment officer at First
Citizens Bancshares in Raleigh, North Carolina.
"Questions over government spending are the big overhang,
and we're looking for Obama to inspire some confidence over that
The White House has signaled Obama will urge investment in
infrastructure and clean energy, suggesting companies in those
sectors may be volatile in Wednesday's session.
"Gun makers could also see a reaction if Obama talks about
anything with respect to gun control," said Teal, who helps
oversee $5 billion. Shares of Smith & Wesson fell 2
cents to $9.11 while Sturm Ruger was up 0.4 percent at
The Dow Jones industrial average was up 47.46 points,
or 0.34 percent, at 14,018.70. The Standard & Poor's 500 Index
was up 2.42 points, or 0.16 percent, at 1,519.43. The
Nasdaq Composite Index was down 5.51 points, or 0.17
percent, at 3,186.49.
Housing shares were among the strongest of the day, led by a
12.5 percent jump in Masco Corp to $20.02 after the home
improvement product maker said it expects new home construction
to show strong growth in 2013. The PHLX housing sector index
rose 3.7 percent.
Avon Products Inc surged 20 percent to $20.79 as the
S&P 500's top percentage gainer after the cosmetics company
reversed sales declines and cut costs.
On the downside, Coca-Cola Co fell 2.7 percent to
$37.56 and was the biggest drag on the Dow after reporting
revenue below estimates, hurt by a weaker-than-expected
performance in Europe.
Michael Kors Holdings shares jumped 8.8 percent to
$62.04 after the fashion company handily beat Wall Street's
estimates and raised its full-year outlook.
With earnings season starting to wind down, Thomson Reuters
data through Tuesday morning shows of the 353 companies in the
S&P 500 that have reported results, 70.3 percent have exceeded
analysts' expectations, above a 62 percent average since 1994
and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated
to have risen 5.3 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.
About 62 percent of stocks traded on the New York Stock
Exchange closed higher while 59 percent of Nasdaq-listed shares
closed in positive territory.