Stocks Brush Off Early Slide

NEW YORK (TheStreet) -- Stocks finished higher Tuesday afternoon, helped by energy, materials and consumer cyclical names, as investors awaited a bevy of corporate earnings news due after the closing bell. The major market averages recovered from a morning slide, itself powered by a mix of tepid earnings and lingering disappointment from IBM's(IBM) revenue miss late Monday.

After falling more than 100 points earlier in the session, the Dow Jones Industrial Average finished 76 points higher, or 0.7%, to 10,230. The S&P 500 added 12 points, or 1.1%, at 1083, and the Nasdaq improved 24 points, or 1.1%, to 2222.

After the closing bell, Apple(AAPL) blew past both profit and sales projections for the third-quarter, saying it nearly doubled total revenue compared to a year ago after selling 8.4 million iPhones.

Yahoo!(YHOO) also beat profit projections late, topping the consensus by a penny in reporting earnings of 15 cents a share for the second quarter. But the Internet search giant reported weaker-than-expected revenue, continuing a trend seen in other earnings releases this season.

Quincy Krosby, chief market strategist at Prudential Financial, said the market likely made an afternoon move higher in anticipation of post-closing news.

"It's been an up-and-down market. The market just changes moods," Krosby said before the close, highlighting growing strength among consumer cyclical names during the session. "It's clear the market was able to take some of the numbers today and just basically move ahead. And it could also be that the market is beginning to look ahead to the after-hours reports and move in now ahead of those."

Earlier, Goldman Sachs(GS) topped expectations with an adjusted second-quarter profit of $2.75 a share, or 75 cents higher than analysts' forecasts. Including a $600 million U.K. bank payroll tax and the $550 million agreement it reached last Thursday to settle civil fraud charges brought by the Securities and Exchange Commission, net earnings were $613 million, or 78 cents a share. Revenue, meanwhile, dropped to $8.84 billion from $13.7 billion last year and fell short of expectations for revenue of roughly $9 billion. But Goldman shares traded higher, gaining $3.23, or 2.3%, to $148.91.

Mike Shea, managing partner at Direct Access Partners, said markets are eager to get a better sense of where financials are headed.

"There's still a strong sentiment that financials and banks are driving the bus -- and certainly tech as well -- so there's a strong focus on the financial sector," Shea said. "So far, from Bank of America(BAC), JPMorgan(JPM), Citi(C) and now Goldman, we see that average trading revenues are down something like 30%-40%. We're still waiting on results from Morgan Stanley(MS) results and a slew of other banks and smaller financials so we're going to have to get some sort of reading on where the financials are going," he said. "That's really what markets are interested in."

IBM was the Dow's biggest laggard with shares losing 2.5% to $126.55 despite surpassing profit expectations by 3 cents with earnings of $2.61 a share. Sales of $23.7 billion missed the $24.17 billion in sales that Wall Street had been anticipating.

Also after Monday's close, Texas Instruments said strong demand helped sales jump 42% to $3.5 billion while earnings grew threefold to 62 cents a share, but shares slipped in after-hours trading after profits met but failed to exceed expectations. Shares slipped 3.1% lower Tuesday to $24.77.

On Tuesday, the Bank of Canada lifted rates by 25 basis points to 0.75%, as expected, but struck a surprisingly dovish tone its statement that said additional increases would be "weighed carefully" because of the uncertain economic outlook.

Overseas on Tuesday, Hong Kong's Hang Seng rose 0.9%, and Japan's Nikkei lost 1.2%. The FTSE in London shed 0.2%, and the DAX in Frankfurt dropped 0.7%.