Updated from 4:16 p.m. EDT
Stocks surged ahead Tuesday as traders focused on upbeat news from
after getting little guidance on monetary policy from
Chairman Ben Bernanke.
Dow Jones Industrial Average
rose 180.54 points, or 1.38%, to 13,308.39. The
finished up 19.79 points, or 1.36%, at 1471.49. The
was higher by 38.36 points, or 1.5%, at 2597.47.
GM lead the Dow with a 4.6% gain, aided by news it plans to offer environmentally friendly vehicles that aren't as reliant on gasoline for power.
Fellow Dow component McDonald's climbed 4% after the fast-food restaurant chain reported an 8.1% jump in August same-store sales. The stock added $1.61 to close at $51.76.
Shares of Western Digital were up 4.4% following the data storage company's move to lift its first-quarter guidance above analysts' forecasts. The shares were higher by 99 cents at $23.40.
supported the Nasdaq with an 18.4% surge after a clinical trial showed that the company's Erbitux drug helped lung cancer patients live longer. ImClone's development partner
also ended the day with gains.
"Investors are getting more comfortable with how the consumer is still spending," said Paul Nolte, director of investments with Hinsdale Associates. "All kinds of consumer-related stocks bounced-back today. That means we might not get anywhere near a recession. There was across-the-board buying today in all sectors. At least for today, traders were feeling a bit better.
Breadth was positive, and volume perked up a bit. On the
New York Stock Exchange
2.89 billion shares changed hands, as advancers topped decliners by an 11-to-5 margin. Volume on the Nasdaq reached 1.77 billion shares, with winners outpacing losers nearly 2 to 1.
Markets were unfazed by comments from Bernanke, who spoke in Germany about widening global imbalances. His remarks, the last expected ahead of the Sept. 18 Federal Open Market Committee meeting, had no mention of monetary policy.
With problems in the credit market still looming and with signs the U.S. economy may be slowing, as seen in the negative jobs report on Friday, most investors are looking for a reduction of at least 25 basis points in the fed funds target rate when the central bank meets next week.
Larry Wachtel, senior market analyst with Wachovia Securities, said that with a speech title including the term "Global Markets" that traders shouldn't have expected any mention of U.S. rate policy.
"It's going to be wait-and-see until the actual Fed policy meeting," he said.
Bernanke's comments came after several speeches from other Fed officials.
Over the weekend, Philadelphia Fed President Charles Plosser somewhat lowered expectations for a rate cut. During the last session, San Francisco Fed President Janet Yellen told the National Association for Business Economics that the recent financial market turmoil will prolong the sluggishness in housing.
Fed Board Governor Fred Mishkin and St Louis Fed President William Poole also offered cautious comments late Monday.
The Commerce Department said the international trade deficit shrank to $59.2 billion in July from a revised $59.4 billion in June. Economists had expected the trade gap to come in at $59.0 billion. U.S. exports rose 2.7% in July, the fastest rate in three years.
Treasury bonds were losing ground. The 10-year was down 11/32 in price, yielding 4.36%. The 30-year note was off 5/32, yielding 4.64%.
Elsewhere, the October front-month crude contract rose 74 cents to close at a record $78.23 a barrel following OPEC's decision to raise its production levels by 500,000 barrels a day. That was a smaller increase than some analysts had been expecting.
Gold futures added $8.90 to close at $721.10 an ounce, and silver tacked on 13 cents at $12.83 an ounce.
said it will revise its second-quarter profit lower by $153 million, due to expenses tied to the unloading of stores in Germany. Wal-Mart climbed 1.6% to $42.94.
saw some buying action after Goldman Sachs upgraded the stock to buy from hold, citing valuation. Shares ended up $1.41, or 2.1%, to $69.87.
One day after
boosted its third-quarter sales outlook, fellow chipmaker
delivered its mid-quarter update. Third-quarter revenue should be $3.56 billion to $3.72 billion, compared with the prior range of $3.49 billion to $3.79 billion.
TI expects a profit from continuing operations between 49 cents and 53 cents, compared with the earlier guidance of 46 cents to 52 cents. Texas Instruments rose 50 cents, or 1.4%, to $35.72.
Markets abroad were mostly higher. Japan's Nikkei 225 rose 0.7% overnight. The Paris CAC 40, London's FTSE 100 and Germany's Xetra Dax each jumped 1.1% or more.