Stocks Ended Today in the Green. All Eyes Are on Earnings

Stocks ended Tuesday by inching up with less than an hour remaining in trading — as if opting to be optimistic about the flood of earnings reports scheduled to be released following the closing bell.

However, even good data from a behemoth like General Electric have done little to boost the market.

The Dow Jones Industrial Average increased by 272 points, or 0.8%, while the S&P 500 increased by 0.7%. The Nasdaq Composite Index rose by 0.8 percent. The S&P 500 and Dow both increased by more than 1% on Monday, while the Nasdaq grew by more than 3%.

This week, the S&P 500 index includes more than 110 firms. Alphabet (GOOGL), General Motors (GM), Advanced Micro Devices (AMD), and PayPal are all on Tuesday's list (PYPL). All arrive following the closing bell.

According to Credit Suisse statistics, about half of the S&P 500's market capitalization has reported profits thus far. Almost three-quarters of businesses are outperforming profit forecasts, with the aggregate profits result coming in 4.2 percent higher than expected.

However, investors have been critical of the firms. According to RBC statistics, as of Monday, just over half of businesses reporting had their stocks decline more than 1% the day after earnings were disclosed. Firms that surpass expectations have had their stock prices decrease by an average of 0.4 percent, while companies that fail expectations have seen their stock prices fall by an average of 3.1 percent.

This is more likely to occur during periods of high stock prices. A high stock price already reflects the future worth of the company's earnings stream.

Stock values have been decreasing, or the multiples investors place on near-term profit projections. This is largely due to rising long-dated bond yields, which have been driven higher by expectations that the Federal Reserve would soon raise interest rates and cease asset purchases. Reduced Fed bond purchases cause bond prices to fall and yield to rise. Increased yields devalue future earnings.

However, equities may continue to be perceived as expensive—and profits would have to exceed forecasts by a large margin to propel markets considerably higher.

On the economic front, there were 10.9 million job opportunities in December, up from 10.5 million predicted and 10.8 million the previous month. Businesses continue to struggle to hire all of the people they require, which might push wages higher and contribute to the inflation that the Fed Reserve is attempting to contain.

The manufacturing index from the Institute for Supply Chain Management came in at 57.6 in December, in line with economists' expectations. Any value greater than 50 indicates growth.

However, this data point featured an inflationary signal as well; the prices paid component increased to 76.1 from 68.2 in the preceding result. This implies that businesses continue to face high expenses, creating an incentive to increase prices and contribute to more inflation. "January's increase in prices paid highlights the risk of further strong hard inflation figures in the following months. "The increase in prices paid in January indicates the risk of further strong hard inflation readings in the coming months," Citigroup analyst Andrew Hollenhorst said.

This was insufficient to keep markets from down Tuesday, but the gains were not quite as robust as they have been in recent days.

Tuesday's steady trade follows a two-day surge. From Friday to Monday, the S&P 500 gained 4.4 percent as it recovered from its January selloff. Prior to Tuesday's acceleration, the market was taking a breather, according to Frank Cappelleri, the chief market technician at Instinet.

Before some get overconfident, the S&P 500 must first surpass several critical levels it is now trading below.

Overseas, London's FTSE 100 index increased by 1%. Numerous Asian stock exchanges were closed for the Lunar New Year holiday, but trading proceeded in Tokyo, with the Nikkei 225 index up 0.3 percent.

Oil prices, however, remained stable at seven-year highs, with US futures for West Texas Intermediate crude up 0.2 percent to a little over $88 a barrel.