Stocks ended Tuesday's session with gains. A flurry of merger and acquisitions activity gave a possible signal of market strength. Investors also geared up for a bevy of earnings announcements expected in the next several days.
The Dow Jones industrial average finished higher by 6.3 points, or 0.07%, to 9,223.09. The broader Standard & Poor's 500 index gained 3.42 points, or 0.34%, to 1,007.84. Meanwhile, the tech-heavy Nasdaq composite index continued its recent outperformance, adding 25.79 points, or 1.5%, to 1,746.5.
Pepsi Bottling Group (PBG) said earnings fell 5.8% for the second quarter, owing to unseasonably cold weather. The earnings were in line with analysts' expectations.
Harry Potter publisher Scholastic (SCHL) warned that quarterly profits would fall short of expectations.
Aluminum producer and Dow industrials member Alcoa (AA) after Tuesday's closing bell announced a decline in second quarter net profit. However, the company's EPS for the quarter exceeded consensus estimates.
Investors anticipate more earnings news the rest of the week. On Wednesday, Internet media company Yahoo! (YHOO) and biotechnology outfit Genentech (DNA) are expected to announce quarterly earnings after the close of trading.
Later in the week, Abbott Laboratories (ABT), PepsiCo (PEP), SunTrust (STI), and General Electric (GE) are expected to report results.
Three major acquisition bids were announced Tuesday, a possible sign of strength in the markets, according to S&P MarketScope. Data storage company EMC (EMC) announced a $1.3 billion acquisition of Legato Systems (LGTO). Legato shares rose 10% Tuesday.
In other mergers and acquisitions news, auto parts maker ArvinMeritor (ARM) said it launched a hostile, $2.2 billion cash bid for Dana (DCN).
Also, trucking company Yellow (YELL) announced it would buy rival Roadway (ROAD) for $966 million.
Shares of financial services firm State Street (STT) rose Tuesday amid speculation in two research reports that it would be acquired. The largest financial services concern in the U.S., Citigroup (C) was mentioned as a possible acquirer.
In the biotechnology sector, CV Therapeutics (CVTX) said after Monday's close that the Food and Drug Administration would review its experimental angina drug, Ranexa, in September.
In Tuesday's only economic report of note, U.S. consumer credit rose $7.34 billion, or 5.0%, in May after a revised $7.8 billion increase in April (from $10.7 billion previously). The May data suggest another fairly solid piece of support for healthy consumer spending over the near term, according to economic research outfit MMS International.
Wednesday brings wholesale trade data. MMS expects wholesale trade inventories to rise 0.1% in May, following a 0.1% drop in April. On Thursday, investors await June import and export price data. Friday brings the June producer price index and May trade balance data.
On the commodities front, oil prices dropped Tuesday after a general strike in Nigeria ended.
Prices of U.S. Treasuries finished in negative territory Tuesday, as stocks swung into the green. The benchmark 10-year note's yield was 3.73%.
According to MMS, a number of corporate offerings, including those from Goldman Sachs (GS) and Calpine (CPN), added to the supply of debt issues on the market and weighed on Treasuries' performance.
European markets were narrowly mixed Tuesday. In London, the Financial Times-Stock Exchange 100 lost 1.2 points, or 0.03%, to 4,073.6. In Germany, the DAX Index gained 11.59 points, or 0.35%, to 3,344.46, as unemployment fell for the second consecutive month, but industrial production declined for a third straight month. In France, the CAC 40 was down by 4.22 points, or 0.13%, to 3,177.97.
In Asia, major stock indexes ended with strong gains. Japan's Nikkei index finished up 103.56 points, or 1.06%, to 9,898.72. Meanwhile, Hong Kong's Hang Seng index rose 100.47 points, or 1.02%, to 9,992.87.