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NEW YORK ( TheStreet) -- Stocks finished on an upbeat note Tuesday as investors cheered a decent start to the U.S. earnings season.
Dow Jones Industrial Average rose 69.8 points, or 0.6%, to close at 12,462. Only seven out of 30 components on the index slipped. Gains were led by
Bank of America(BAC) and
General Electric(GE) were among the few Dow stocks that declined.
S&P 500 was up 11.4 points, or 0.9%, at 1292. The
Nasdaq added 25.9 points, or 1%, at 2703.
Despite projections for weaker fourth-quarter earnings from U.S. corporations, a wave of bullishness that the domestic market can weather the European debt crisis seems to be prevailing. "The good news is expectations are low despite the economy showing some signs of improvement," wrote Gary Thayer, chief macro strategist at Wells Fargo Advisors. "We believe investors are more likely to see better-than-expected results rather than weaker-than-expected results."
Alcoa(AA - Get Report), which unofficially marked the beginning of the earnings season with its report after Monday's close, rose 0.2% despite its first quarterly loss since 2009. The company said it lost 3 cents a share in the quarter, in line with analysts' estimates. However, it reported revenue of $5.99 billion in the fourth quarter, beating the forecast for $5.7 billion, and gave a positive outlook on global demand for aluminum.
"What will make things interesting today is that we have no significant news scheduled," RealMoney contributor
James "Rev Shark" DePorre wrote. "At the moment, the market is in an optimistic mood because there isn't anything particularly negative going on and no real news from Europe."
"Right now everything is hunky-dory," says RealMoney columnist and Action Alerts PLUS manager Jim Cramer. "We have that new money flowing in like mad. We have the end of the nasty redemptions. We have the classic overlook of Alcoa."
Jitters ahead of bond auctions in Spain and Italy later in the week kept a cap on optimism Tuesday. Furthermore, Fitch Ratings said earlier that Italy poses the biggest risk to the euro because of its debt burdens and high borrowing costs.
Nevertheless, the euro was rising for the second day in a row. Several meetings between key leaders in the region are expected to set the stage for a European Union summit meeting at the end of January. German Chancellor Angela Merkel and International Monetary Fund head Christine Lagarde plan to meet Tuesday.
Germany's DAX rose 2.4% while London's FTSE was up 1.5%. In Asia, China posted its smallest trade surplus in 2011 since 2005, suggesting that the country is growing less reliant on exports. Japan's Nikkei Average settled 1.16% lower and Hong Kong's Hang Seng was up 1.47%.
In U.S. economic news, the National Federation of Independent Business said that small businesses grew more confident about the economy's future in December for the fourth straight month. NFIB's Small Business Optimism Index rose by 1.8 to 93.8 points.
While still below levels seen before the recession, the reading bodes well for the domestic jobs market and the larger economic recovery. Research firm
High Frequency Economics estimates that small businesses account for about half of gross domestic product growth in the U.S. and half of all employment.
Wholesale inventories rose less than expected in November, according to the Commerce Department. Inventories increased by 0.1% compared to a forecast 0.5% by Thomson Reuters. The gain however adds to a 1.6% rise in the prior month and suggests that manufacturing continues to grow.
In corporate news, jewelry retailer
Tiffany(TIF - Get Report) said that holiday sales weakened in the U.S. and Europe, suggesting a slowdown in luxury spending. While sales in Asia, excluding Japan, soared 19% to $1.65 million, sales in North and South America rose 2% in November and December, stymied by a 1% decline in sales at Tiffany's flagship store on Fifth Avenue in New York.
Tiffany also lowered its earnings forecast to a range of $3.60 to $3.65 per share for the year ending January 31 from a range of $3.70 to $3.80. Shares plummeted 10.5% to $59.94.
Eastman Kodak (EK)announced a new business structure in an attempt to reduce costs and transform itself more quickly into a digital company. According to
The Wall Street Journal, the company is preparing to file for bankruptcy in the coming weeks. Kodak plans to reduce its current three segments -- graphic communication, consumer digital imaging, and traditional film and paper products -- to two segments -- commercial and consumer. Shares jumped 50% to 60 cents.
Juniper Networks(JNPR - Get Report), the communications networking equipment maker, lowered its fourth-quarter outlook, citing weak demand from service providers.
Juniper said it now expects non-GAAP earnings of 26 cents to 28 cents a share on revenue ranging from $1.11 billion to $1.12 billion. In October, the company forecast non-GAAP earnings of 32 cents to 36 cents a share for the period on revenue of between $1.16 billion to $1.22 billion. Analysts polled by
Thomson Reuters forecast a profit of 34 cents a share in the December-ended period on revenue of $1.19 billion. Shares were down 0.9% to $21.34.
Cirrus Logic(CRUS - Get Report) boosted its fiscal third-quarter sales outlook and lifted its fourth-quarter forecast, saying "demand remains robust following the holiday season."
The audio chip maker said it expects to report about $122 million in revenue for the fiscal third quarter ended Dec. 31, compared to $95.6 million the same quarter a year ago. Previously, Cirrus saw revenue of at most $108 million. Also, based on sales so far this year Cirrus sees revenue of $105 million in the fiscal fourth quarter ending in March. The company will report full third-quarter results Jan. 26. Cirrus shares surged 15.7% to $19.64.
Philips Electronics(PHG - Get Report), the world's leading lighting maker, warned fourth-quarter profit would be soft because of weakness in European markets.
"Our expected fourth quarter financial results have been affected by the weakness in Europe, which has impacted our health care business, as well as pricing in our consumer lighting business," said CEO Frans van Houten. Philips said it expected fourth-quarter underlying earnings of about €500 million, down from €910 million a year earlier. The stock fell 5.5% to $19.05.
Liz Claiborne(LIZ) issued a disappointing financial outlook because of negative same-store sales performance and soft margins for its Juicy Couture brand. It also said Chief Financial Officer Adam Warren is leaving by mutual agreement.
The company now sees fiscal 2011 pro forma adjusted earnings before interest, taxes, depreciation and amortization at the low end of its previously disclosed range of $80 million to $90 million. Direct-to-consumer same-store sales for Juicy Couture were down 7% and 5% in November and December, respectively. For fiscal 2012, Liz Claiborne now sees adjusted EBITDA of $125 million to $140 million vs. a prior projection of $130 million to $150 million. Shares plunged 13% to $8.64.
February oil futures rose 93 cents to settle at $102.24 a barrel. In other commodities, February gold futures added $23.40 to close at $1,631.50 an ounce as the dollar turned lower and as the price broke above some technical levels.
The dollar index was down 0.1%. The benchmark 10-year Treasury was falling 3/32, raising the yield to 1.974%.
-- Written by Andrea Tse and Chao Deng in New York.