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Stocks romped ahead on Tuesday as investors feted a raft of mostly positive earnings reports from banks and drugmakers along with a dip in oil prices from session highs.
The Dow Jones industrial average added 70.79 points, or 0.67%, to 10,628.79. The broader Standard & Poor's 500 index was up 9.64 points, or 0.81%, to 1,194.16. The Nasdaq composite index gained 18.13 points, or 0.87%, moving to 2,106.04.
Looking ahead, Wednesday will be another busy session on the earnings front. Among the companies due to report are telecom and wireless eqiupment companies Lucent (LU
) and Qualcomm (QCOM
), low-fare airline Southwest (LUV
), drugmaker Pfizer (PFE
), and financial services outfit JP Morgan Chase (JPM
The economic data docket is also stacked. Most awaited is the December report on consumer inflation known as the
consumer price index (CPI). The gauge is seen flat in December, vs. a 0.2% increase in November. Excluding volatile food and energy prices, the CPI is expected to increase 0.2% the same rise in December.
Also to be released are figures on December housing starts. They are expected to rise to a 1.97 million annualized rate from 1.771 million in the previous month.
On Tuesday, plenty of the earnings news was positive, helping stocks. The third largest U.S. bank Bank of America (BAC
) posted higher fourth quarter profit in line with estimates, thanks to growth in loans and deposits and its acquisition of FleetBoston Financial.
Also in the banking sector, Wells Fargo (WFC
), the fifth largest U.S. bank, posted 10% higher fourth quarter profit, thanks to growth in loans and deposits.
But eyes remained on computer and services provider IBM Corp. (IBM
), a tech bellwether and Dow component. After the market's closing Tuesday, Big Blue posted expectation-beating profit as product sales were helped by a weaker U.S. dollar.
Two other tech luminaries reported results after the bell Tuesday. Cellphone hardware maker Motorola (MOT
) posted 34% higher quarterly earnings, topping expectations, thanks to strong sales of its phones. Internet portal Yahoo (YHOO
) also saw a surge in quarterly profit.
Returning to Tuesday's regular-session action, Dow member 3M (MMM
), which makes Scotch tape and Post-It notes, reported higher earnings, citing strength across its businesses.
In drugs news, Abbott Laboratories (ABT
) posted 3.2% higher fourth-quarter profit on stronger prescription drugs sales, including Humira which treats rheumatoid arthritis.
Also in drugs, Forest Laboratories (FRX
) posted higher quarterly profits as stronger sales of antidepressant Lexapro and Alzheimer's drug Namenda offset declining sales of another antidepressant.
In merger news, cable mogul John Malone said Liberty Media (LBTYA
) is to buy the remainder of cable provider UnitedGlobalCom (UCOMA
) for about $1.71 billion.
Doughnut chain Krispy Kreme Doughnuts (KKD
) moved sharply higher after announcing that it had named Stephen Cooper as CEO, replacing Scott Livengood, who retired as chairman, president, and CEO. Steven Panagos was named named president and COO. The stock price has declined amid a federal securities investigation and allegations that the company enhanced sales figures.
Crude prices finished flat at $48.38 a barrel mark after a run-up on supply concerns. There remain concerns over the cold weather in the US northeast, outages worries and rising geopolitical tensions.
U.S. Treasuries finished mostly higher. The 10-year Treasury note was yielding 4.19%.
European stock markets closed mixed on Tuesday.
In London, the Financial Times-Stock Exchange 100 index was down 22.80 points, or 0.47%, moving to 4,823.90 as U.K. consumer-price index rose a more than expected 0.5% in December for an annual rate of 1.6%, the highest level since June, 2004. Corus Group was lower after Standard & Poor's said higher raw-material costs may hurt profits in the second half of the year.
Germany's DAX index added 5.20 points, or 0.12%, to 4,250.71 as oil prices surge on cold weather demand. Traders were ignoring a report that German exports rose to a record last year. Infineon Technologies was lower after UBS cut the chipmaker's earnings forecast. ThyssenKrupp was lower after Standard & Poor's said European steel prices may start falling in the second half of this year. Bayerische Motoren Werke was lower on Financial Times Deutschland reporting the luxury-car maker won't match last year's earnings growth in 2005.
In Paris, the CAC 40 index lost 6.42 points, or 0.17%, to 3,875.02 as higher oil prices restrain traders. Alcatel was lower after Lehman Brothers lowered its rating on the stock to neutral from positive.
Asian markets finished lower on Tuesday. Tokyo's Nikkei average fell 63.84 points, or 0.56%, to 11,423.26 on profit-taking following a two-day rally. Exporters fell, with Honda Motor sliding 1.47% while Toyota Motor inched down 0.24%. Real estate names declined after Merrill Lynch said a slowdown in condominium sales is likely to become a risk factor from April. Fuji TV fell 2.65% after it said on Monday it would launch a US$719 mln tender offer to take control of Nippon Broadcasting System. On the upside, Mitsubishi Motors rose after the company announced that it would supply 36,000 small passenger cars per year to Nissan Motor.
In Hong Kong, the Hang Seng index fell 17.43 points, or 0.13%, to close at 13,604.22 as investors remained cautious due to lack of fresh catalysts.