Before the bell, Merrill Lynch (MER - commentary - Cramer's Take) said third-quarter earnings fell 8% from a year ago to $920 million, or 93 cents a share. Profit was about a penny a share better than forecasts, although Merrill characterized asset markets as challenging and said revenue fell 3% from last year's quarter. Shares rose $1.48, or 2.9%, to $52.48.

Johnson & Johnson's third-quarter earnings rose 13% from a year ago, beating analysts' estimates. The health care product maker posted a profit of $2.3 billion, or 78 cents a share. Analysts had forecast earnings of 76 cents a share according to Thomson First Call.

Shares ended $1.46, or 2.6%, higher at $56.82.

Also reporting was homebuilder MDC Holdings (MDC - commentary - Cramer's Take), which posted third-quarter net income of $3.07 a share, about 34 cents better than predicted. Revenue rose 28.4% from a year ago to $1.03 billion. Shares of MDC Holdings gained $4.80 to $70.46.

Shares of Travelzoo (TZOO - commentary - Cramer's Take) jumped nearly 12% Tuesday, after the company announced third-quarter earnings rose to $2.1 million, or 12 cents a share, in the third quarter from $617,000, or 3 cents a share, last year. Shares of Travelzoo rose $6.47 to $63.35.

Overseas markets were lower, with London's FTSE 100 dropped 0.8% to 4649.80 and Germany's Xetra DAX slipped 1.5% to 3957.60. In Asia, Japan's Nikkei fell 1.3% overnight to 11,202, while Hong Kong's Hang Seng lost 0.4% to 13,252.

Stocks rose modestly in low Columbus Day volume Monday, with the Dow Jones Industrial Average gaining 27 points, or 0.3%, to 10,082 and the Nasdaq Composite rising 9 points, or 0.5%, to 1929.