Bulls Show Some Fight - TheStreet

Updated from 4:15 p.m. EST

Stocks in New York overcame early selling pressure and a drop in the energy and mining sectors to close higher Tuesday.

The

Dow Jones Industrial Average

was down by as many as 62 points earlier before rallying to end up 19.07 points, or 0.15%, to 12,786.64, its fourth straight record finish.

Aiding the Dow's turnaround were gains in retail components

Wal-Mart

(WMT) - Get Report

and

Home Depot

(HD) - Get Report

. Overall, 16 of the 30 industrials finished the day in positive territory.

The

S&P 500

rose 4.14 points, or 0.28%, at 1459.68, and the

Nasdaq Composite

added 16.73 points, or 0.67%, to 2513.04.

"The industrial group actually is declining, with more than half of its components declining over the past couple of weeks," said Paul Nolte, director of investments with Hinsdale Associates. "The more defensive groups like consumer goods and health care continue to lag, an indication of investors' appetite for risk and belief a bull market is upon us."

Roughly 2.38 billion shares changed hands on the

New York Stock Exchange

, and volume on the Nasdaq reached nearly 2.20 billion shares. Winners outpaced losers 5 to 3.

As Wall Street traders returned from a long weekend, they were greeted by word that satellite-radio rivals

XM

( XMSR) and

Sirius

(SIRI) - Get Report

will try to make a go of it as a single company.

The sides said on Monday, a market holiday, that they plan to merge in a $4.57 billion deal. Shareholders of each company will own about half of the new firm. XM surged 10.2% to $15.41, and Sirius shares jumped 6% to close at $3.92.

Meanwhile, Wal-Mart topped analysts' fourth-quarter earnings estimates and offered in-line guidance for the first quarter and full year. The retail giant had a quarterly profit of 95 cents a share on revenue of $99.1 billion. Analysts were calling for earnings of 90 cents a share and revenue of $99.6 billion. Shares rose $1.78, or 3.7%, to $50.26.

Home Depot, like Wal-Mart a member of the Dow, posted an adjusted quarterly profit of 50 cents a share, matching the consensus forecast. However, sales of roughly $20.3 billion were about $500 million below expectations. Home Depot finished a choppy session down 10 cents, or 0.2%, to $41.34.

Wal-Mart's rival

Target

(TGT) - Get Report

was rising after the retailer said it expects February comp sales to increase in a range of 4% to 6%. Target rose $1.41, or 2.2%, to $64.32.

Analysts made plenty of ratings changes before the session began. Among upgrades, JPMorgan raised

MasterCard

(MA) - Get Report

to overweight from neutral and Bear Stearns upped

Applebee's

(APPB)

to peer perform from underperform. MasterCard lost 0.5% to $107.82, while Applebee's tacked on 1.7% to $26.90.

On the negative side, Goldman Sachs downgraded

Circuit City

(CC) - Get Report

to neutral from buy, and Citigroup reduced

Coca-Cola

(KO) - Get Report

to hold from buy. Circuit City bounced from session lows and gained 0.2% to $21.33. Coke dipped 0.2% to close at $47.78.

Away from equities, bond prices were rebounding from early losses. The 10-year rose 1/32 and to yield 4.68%, and the 30-year was up 5/32, yielding 4.78%. The dollar rose against the yen, but fell vs. the euro and the pound.

Major commodities were uniformly lower at the New York Mercantile Exchange. The March crude oil contract, which expired at the end of the session, slid $1.32 to close at $58.07 a barrel, and gold dropped $11.80 to $661 an ounce.

By sector, miners and precious metals were hit hardest. The Philadelphia Gold & Silver index slipped 1.8%. Also losing ground was the Philadelphia Oil Service Sector index, which sank 1%. Among winners, the Nasdaq Transportation index rose 1.2%, and the Amex Airlines index added 0.8%.

Earlier,

Federal Reserve

Governor Susan Bies, who is set to retire from her post on March 30, said that although the U.S. may see a bottom in slumping housing demand, "the potential for inventory correction is still very high."

Bies' remarks come nearly a week after Fed Chairman Ben Bernanke said during his congressional testimony that the central bank is comfortable with interest rates and that some tentative signs of stabilization have recently appeared in the housing market.

Meanwhile, the economic calendar is void of any releases, so traders will have to wait until Wednesday's release of the latest consumer price index to get another clue about the inflation picture. Economists are expecting a 0.1% rise in the index, down from December's jump of 0.5%. Excluding food and energy, the core CPI is expected to remain flat from the prior month at 0.2%.

Last week, the Labor Department said its producer price index eased 0.6% in January. The core index rose 0.2%, matching forecasts. The core rate advanced 1.8% year over year, within the

Federal Reserve's

comfort range of 1% to 2%.

Overseas, London's FTSE 100 was down 0.5% to 6412, and Frankfurt's Xetra DAX was 0.1% weaker at 6983. Tokyo's Nikkei was unchanged at 17,939. Hong Kong was closed for holiday.