Stocks rallied on Tuesday as investors hunted for bargains after the market's recent losses. Also fueling the move higher: Good news from two key Dow components and reports showing continued strength in the economy.
The Dow Jones industrial average closed higher by 126.35 points, or 1.29%, to 9,946.22. The Nasdaq Composite, meanwhile, gained 30.97 points, or 1.87%, to 1,687.90. The broader Standard & Poor's 500 index was up 11.42 points, or 1.07%, to 1,076.87.
Looking ahead to Wednesday's session, the corporate earnings calendar is expected to be fairly light. Insurer ACE Ltd. (ACE) and personnel management systems company Administaff (ASF) are two of the companies expected to report results.
As far as economic data is concerned, investors will be watching most closely the Institute of Supply Managment's gauge of activity in the manufacturing sector in April. Economists expect a reading of 55, down from 55.6 in March. Although that would mean a decrease over the previous month's rate, any number over 50 indicates an expansion.
Also due out on Wednesday are reports on U.S. construction spending in March and April vehicle sales.
On Tuesday, Dow member and consumer products giant Procter & Gamble (PG) said its third-quarter profits before special items beat analysts' expectations, lifted by Clairol hair-care products sales and other lines.
IBM (IBM), the world's largest computer maker and another Dow component, said its board raised the quarterly dividend 7% and authorized a stock buy-back of up to $3.5 billion.
In economic news, the Conference Board's widely-watched gauge of consumer confidence, which measures consumer optimism about the economy, eased moderately in April to 108.8 from 110.7 in March.
The Chicago purchasing managers' index, a barometer of manufacturing activity in the Midwest, fell to 54.7 in April from 55.7 in March -- but any number over 50 still indicates an expansion. April's number was a shade below economists' median expectations of 55.
The Nasdaq was lifted by shares of struggling long-distance carrier WorldCom (WCOM) after Chief Executive Officer Bernard Ebbers resigned. Stock of the company has taken a huge hit this year. John Sidgmore, vice chairman of WorldCom, will take over as CEO and president, the company said in a statement.
But there was more unpleasant news from the battered telecom services sector. Qwest (Q) reported a quarterly loss after several one-time charges.
In other sectors, drugmaker Eli Lilly (LLY) cut its earnings and sales guidance for 2002, blaming a later-than-expected launch of a new anti-impotence drug.
Dynegy (DYN), the energy wholesaler, posted a first quarter loss, mostly because of charges related to its telecom unit.
Jones Apparel Group (JNY), the apparel maker and retailer behind brands including Jones New York and Nine West, said its first quarter profits dropped 34% as sales declined and it took a charge for an accounting change.
Treasuries ended mostly higher. Tuesday's economic data, although solid, was not seen as ammunition for the Federal Reserve to raise interest rates. S&P MMS notes that the long end of the Treasury curve outperformed.
In Tuesday's other economic news, the Bank of Tokyo Mitsubishi-UBS Warburg says chain store sales dipped 1.7% for the week ended April 27, down from a 1.4% increase for the previous week, according to Standard & Poor's economic research unit MMS. Sales slowed to just a 3.3% gain versus the same week a year ago, down from the 6.0% reported last week.
European markets ended Tuesday's session with gains. London's FTSE 100 was up 11.70 points, or 0.23%, to 5,165.60, after a research survey showed a rise in British consumer confidence in April.
France's CAC 40 index gained 32.36 points, or 0.73%, to 4,462.74 as the French unemployment rate rose to a 17-month high in March.
Germany's DAX index was up 33.16 points, or 0.66%, to 5,041.20 as German machinery orders fell 9% in March. The market was also hindered by reports the IG Metall Union will call a strike soon over a wage dispute.
Asian stocks finished mixed. Japan's Nikkei 225 Index was off 48.85 points, or 0.42%, to 11,492.54. Hong Kong's Hang Seng stock index was up 136.09 points, or 1.20%, to 11,497.58.