Stocks Make Halting Advance

After a monthlong market correction, Tuesday's gains were most welcomed by traders. But any optimism was dampened by the market's shrinkage in the final hour of trading.

After trading as high as 10,509.83, the Dow Jones Industrial Average dropped from its session highs in the final hour of trade, closing up 92.95 points, or 0.9%, to 10,462. Despite losing some altitude, the Dow posted its best gain since Dec. 21. Following similar patterns, the S&P 500 closed up 4.66, or 0.4%, to 1168.41, vs. its intraday high of 1174.30, while the Nasdaq Composite gained 11.25, or 0.6%, to 2019.95 after trading as high as 2037.18.

Newswires provided plenty of positive talking points to set the groundwork for a day that seemed to bode well for a much-desired rebound for stocks.

The Conference Board said its consumer confidence index rose unexpectedly to 103.4 in January, after economists had predicted a dip. That contradicted continued talk about consumer spending weakness on the horizon after the University of Michigan said its consumer sentiment index was lower for the month.

Amid a sea of earnings news, Merrill Lynch (MER Quote), Johnson & Johnson (JNJ Quote) and Merck (MRK Quote) beat expectations despite posting year-over-year earnings declines.

Overseas, China recorded 9.5% GDP growth for the fourth quarter, higher than economists' estimates that called for 8.6% growth. The report raised spirits in the U.S., where investors have long been concerned about efforts in Beijing to slow China's economic growth, for fears of overheating.

Still, as far as earnings and economic indicators go, the market has not exactly been starved for good news in January. Overall earnings growth for the S&P 500 has been posting better-than-expected results throughout the reporting season, and recent economic data have been stellar for the most part.

Rather than mounting a fresh run to the upside, Tuesday's action looked more like a stabilizing day at best. The Dow is now up 0.7% for the week, but still down 3% for 2005. The S&P remains negative for the week, down 0.6%, and down 3.6% for the year.