) restored optimism toward corporate earnings after weak numbers from Citigroup (C
) on Monday. Results from Merrill Lynch (MER
) also beat expectations.
The Dow Jones industrial average rose 71.57 points, or 0.68%, to 10,646.56. The broader Standard & Poor's 500 index was up 8.22 points, or 0.67%, to 1,229.35. The tech-heavy Nasdaq composite climbed 28.31 points, or 1.32%, to 2,173.18.
In the energy markets Tuesday, August West Texas Intermediate crude oil was up 14 cents at $57.46 a barrel, as short covering ahead of tomorrow's weekly EIA inventory data was likely behind the pre-close rally, says Action Economics.
On Wednesday, Fed Chairman Greenspan's testimony will be the focus of global financial markets, says Action Economics. Greenspan is expected to give an upbeat assessment of the economy, suggesting more rate hikes to come. "However, we doubt he'll imply any change in the FOMC's measured trajectory," says Action Economics.
On the earnings front Wednesday, eBay (EBAY
), General Motors (GM
), Pfizer (PFE
), and Qualcomm (QCOM
) are just a few companies reporting results.
In corporate news Tuesday, Hewlett-Packard (HPQ
) announced it will cut 14,500 jobs over the next six quarters as part of a restructuring plan. The company sees annual savings of about $1.9 billion. It will record related charges of about $1.1 billion over the next six quarters.
After the market close Monday, IBM reported second-quarter earnings per share of $1.12, beating the consensus forecast of $1.03 and up from $1.01 a year ago, as other income (vs. year ago other expense) offset a 3.6% revenue decline.
) reported second-quarter EPS of 47 cents, vs. 61 cents a year ago (excludes items), on 3.7% lower sales. The auto maker reaffirmed $1.00-$1.25 2005 EPS (excluding items) guidance.
Merrill Lynch posted $1.14, vs. $1.05, second-quarter EPS on a 20% revenue rise.
) shares rose ahead of its earnings release after the market close.
However, Avon Products (AVP
) shares fell nearly 14% after the cosmetics maker reported second-quarter results and warned that third-quarter earnings would be lower than analysts' estimates.
Also on the earnings calendar later today are Motorola (MOT
), Yahoo (YHOO
), Amgen (AMGN
), Johnson & Johnson (JNJ
), and Wachovia (WB
In economic news, U.S. housing starts were flat at a 2.004 million pace in June following a revised 2.004 million rate in May (2.009 million previously). Building permits were up 2.4% to a 2.111 million rate. "The data weren't as strong as expected, though still reflect a very solid housing market," says Action Economics.
Treasuries traded higher, sending yields lower. The 10-year note yielded 4.19%. "Follow-through selling from the Greenspan "note" to the JEC dried up as the bond market set up for the main event on Wednesday," says Action Economics.
European stock markets finished mixed on Tuesday. London's FTSE 100 index was off 12.7 points, or 0.24%, to 5,201.5 on profit taking.
Germany's DAX index rose 50.97 points, or 1.08%, to 4,770.54 following a report investor confidence in Germany rose to a 10-month high in July as the euro's decline helped exporters.
In Paris, the CAC 40 index rose 60.78 points, or 1.39%, to 4,424.25.
Asian markets closed higher on Tuesday. In Japan, the Nikkei 225 index edged up 6.16 points, or 0.05%, to 11,764.84 as market participants awaited June quarter earnings from U.S. chip bellwether Intel today. Banks fell after the Nihon Keizai newspaper said Mitsubishi Tokyo Financial Group and UFJ Holdings may delay merging some of their banking units until next year.
In Hong Kong, the Hang Seng index closed marginally higher at 14,567.74. Gains in telecommunications names China Mobile and China Unicom kept the Hang Seng index positive, but the broader market showed weakness, reports Standard & Poor's MarketScope.