Stocks Close Higher
Stocks rallied Tuesday on the back of bullish sentiment toward earnings and economic growth, with the Nasdaq reaching a four-year high, according to Standard & Poor's Marketscope. Energy, basic materials and IT names lead the market advance.
The Dow Jones industrial average gained 60.59 points, or 0.57%, to 10,683.74. The broader Standard & Poor's 500 index gained 8.76 points, or 0.71%, to 1,244.11. The tech-heavy Nasdaq composite gained 22.77 points, or 1.04%, to 2,218.15.
Looking ahead to Wednesday, the Institute for Supply Management's July survey on business activity outside the manufacturing sector will be released. Among the companies reporting earnings Wednesday is media group Time Warner (TWX ).
In economic reports Tuesday, data showed that personal income rose 0.5% in June, slightly higher than the 0.4% increase economists were expecting, and higher than the 0.2% gain in May. Consumer spending rose 0.8%, which was in line with forecasts, after remaining flat in May.
In the energy markets, the price of crude oil for September on the New York Mercantile Exchange ended the day up 32 cents at $61.89 a barrel, ahead of Wednesday's weekly report on inventories.
June factory orders rose 1%, meeting expectations, after rising an upwardly revised 3.6% in May.
Automakers also reported strong July sales in the afternoon. Ford (F ) said sales surged 29% year over year in July, thanks to strong truck sales and its discounting program, while DaimlerChrysler (DCX ) said sales in its Chrysler and Mercedes units jumped 25%. General Motors (GM ) posted a July sales gain of 15% year over year.
In corporate news, Chinese oil group Cnooc (CEO ) dropped its bid for U.S. oil company Unocal (UCL ), freeing rival bidder Chevron (CVX ) to proceed with its $17.5 billion deal to acquire the group.
Tyco International (TYC ) reported a 29% rise in third quarter earnings to $1.19 billion, or 56 cents a share, beating Wall Street expectations. Revenue, however, was lower than expected and the conglomerate's guidance for the fourth-quarter also fell short of analysts' estimates.
Cable television company Comcast (CMCSA ) said Tuesday that second-quarter profit grew 64% to $430 million, or 19 cents per share, well ahead of analysts' forecasts.
Telecommunications provider Qwest (Q ) said Tuesday that its second-quarter loss dropped to $164 million, or 9 cents per share, from $776 million, or 43 cents per share, in the period last year.
Chipmaker Maxim Integrated Products (MXIM ) rose Tuesday after reporting Monday after the close a 1% increase in quarterly profit to $126.1 million, or 37 cents per diluted share.
Treasury prices were lower Tuesday, with the yield on the benchmark 10-year note at 4.33% at the end of the day.
European stock markets closed higher Tuesday. London's FTSE 100 index was up 36.70 points, or 0.69%, to 5,327.50, with help from some firm earnings reports and lower oil prices.
Germany's DAX index added 42.02 points, or 0.86%, to 4,932.87, following reports that Eurozone June unemployment was 8.7%, revised from 8.8%. Continental was among the gainers after the tire-maker reported its second-quarter profit nearly doubled from a year ago.
In Paris, the CAC 40 index gained 46.46 points, or 1.04%, to 4,503.33. Michelin gained on its German peer Continental's strong results.
Asian markets finished mixed Tuesday. In Japan, the Nikkei index closed down 6.72 points, or 0.06%, at 11,940.20, on profit-taking as the index reached a 13-month intraday high shortly after the open.
In Hong Kong, the Hang Seng index gained 158.20 points, or 1.06%, to 15,137.08, led by the bank HSBC, which posted better-than-expected first half results.