Joseph A. Ferris III

Energy stocks saw the biggest gains on the S&P 500 as oil prices rallied, and the index closed relatively flat.

First, the scoreboard:

• Dow: 18,053.62 +76.58 (0.43%)
• S&P 500: 2,096.75 +4.32 (0.21%)
• Nasdaq: 4,976.81 -11.44 (-0.23%)

And now, the top stories on Tuesday:

1. Retail sales rose 0.9% month-over-month in March, lower than expectations for a 1.1% climb. The monthly gain, however, is up a 0.6% decline in February and “would seem to confirm that the coldest winter on record in the Northeast explains much of the weakness in the preceding two months,” Capital Economics’ Paul Ashworth wrote in an email after the data release. “Core” retail sales excluding auto and gas sales rose 0.5% versus 0.6% expected. Compared to the previous year, food and drinking services places saw the biggest jump, at 7.7%.
2. In other economic data, producer prices climbed 0.2% month-over-month in March, matching forecasts. Excluding food and energy, core PPI climbed 0.2%; economists were looking for a 0.1% increase. And, the NFIB’s Small Business Optimism Index fell to 95.2 in March from 98.0 the previous month, and missed the consensus for 98.2.
3. West Texas Intermediate crude rallied by as much as 3% and then trimmed gains after a government report increased US oil production forecasts. The Energy Information Administration’s annual energy outlook projected that the US will produce 10.6 million barrels per day in 2020, a million more than it had previously forecast. The EIA also sees US export volumes matching imports for the first time in over 50 years.  
4. And, Morgan Stanley forecasts the plunge in rig counts will bottom in 12 weeks. In a note Tuesday, Ole Slorer said the call is based on a 20-year-long historical pattern in which counts bottomed about 25 weeks after oil producers started taking rigs offline. We’re in week 13.
5. Avon shares rocketed higher by more than  15% after the Wall Street Journal reported it is considering selling its struggling North American business. On Monday, the beauty products retailer cancelled its analyst meeting scheduled for next month because executives would have had to discuss preliminary plans, the Journal reported. North American revenues fell 12% in the fourth quarter of 2014 compared to the previous year, and 17% for the full year compared to 2013, its earnings statement showed. The stock has tanked 45% in the last 12 months.
6. Shares of 58.com, the so-called ‘Craigslist of China’ surged by up to 32% after the Financial Times reported it plans to merge with Ganji.com, another China-based classifieds site. Chinese internet stocks are soaring, with some investors concerned they are in a bubble.
7. Zillow’s acquisition of Trulia is taking longer than expected, and now it has slashed its revenue outlook. The company expects full-year revenues of $ 690 million, below expectations for $ 750 million. Shares fell by up to 9% after an investor call, during which CEO Spencer Rascoff said the company faced a “protracted FTC approval process which only ended two months ago.
8. Wells Fargo and JPMorgan kicked off big banks’ earnings season, and both beat on revenues and profits. In the first quarter, Wells Fargo posted earnings per share of $ 1.04 ($ 0.98 expected) on revenues of $ 21.28 billion ($ 21.24 billion expected,) while JPMorgan raised dividends by 10% and posted EPS with items of $ 1.45 ($ 1.39 expected) on revenues of $ 24.8 billion (24.5 billion expected.)
9. Pharmaceutical giant Johnson & Johnson lowered its full year guidance due to the impact of foreign currency movements. It reported first quarter earnings per share of $ 1.56, beating estimates of $ 1.53 on revenues of $ 17.4 billion. It expects full year EPS of $ 6.04-$ 6.19 per share.
10. Fears of a bubble in stocks and bonds are at the highest level in at least decade. In a Bank of America Merril Lynch survey of 145 fund managers, 54% more participants said both asset classes are overvalued. They hold about $ 494 billion in assets combined.

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