Updated from 4:16 p.m. EST
Stocks in New York registered late-day gains as chatter from Washington paired with promising housing numbers from earlier in the day played out alongside financial woes, decreasing auto sales, and another batch of earnings.
Dow Jones Industrial Average
rose 141.53 points, or 1.8%, to 8078.36, and the
added 13.07 points, or 1.6%, to 838.51. The
tacked on 21.87 points, or 1.5%, to 1516.30.
After better-than-expected earnings,
led the gainers on the Dow, rising 6.4% to $30.24, weighing against a handful of falling financials.
Among the leading decliners,
Bank of America
was off by 4.6%, and
traded 5.2% lower.
"There has been chatter about liquidity concerns for regional banks, and that's been weighing on the broader financials," said Michael James, managing director at Wedbush Morgan Securities.
Bank bailouts are a global concept now. Sweden's government said Tuesday that it's prepared to inject roughly $6 billion into the nation's banks in a bailout initiative designed to boost lending to Swedish companies.
In the U.S., with the first half of the $700 billion Troubled Asset Relief Program (TARP) already allocated and the distribution of the second half on the table, banks are under pressure to increase their lending and offer taxpayers some justification for the bailout infusions.
Citigroup, which has taken $45 billion in U.S. government help, has said it will
spend $36.5 billion to issue mortgages, make credit card loans and buy mortgage-backed securities in the coming months.
Not helping financials,
posted a fourth-quarter loss on its recent acquisition of lender National City -- it will eliminate 5,800 jobs in an attempt to remedy its troubles. Its shares pulled back 7.2% in the session.
But, despite continued weakness in financials, murmurs from Washington helped to put some positive pulse in the broader markets late in the day.
In an interview with the
Wall Street Journal
, Treasury Secretary Tim Geithner cautioned about the steps Japanese authorities took in response to that nation's historic economic decline, advocating the massive $890 billion stimulus proposal to remedy the current American crises.
The crisis in the U.S. "is dramatically worse today because collectively policy makers were little slow to escalate both on the fiscal side and on the financial side," Geithner said.
The U.S. Senate began debating possible changes to the economic stimulus proposal with lawmakers on Tuesday. A group of Republican Senators has offered a $445 billion alternative plan to stimulate the economy -- roughly half of which would be in the form of tax cuts.
The counter-proposal provided some strength to the market late in the day, as it added to the perceived likelihood that a bill will get passed, Wedbush Morgan's James said.
"People in general are looking for any signs of something positive that can give them reasons to own stocks, given January's horrible start to the year."
With that in mind, what's not to like about better-than-expected economic data? Home sales rebounded in December as more buyers took advantage of improved affordability conditions, according to the National Association of Realtors. The organization's pending-home-sales index increased 6.3% to 87.7, marking the first improvement since August, an upside surprise for economists who'd predicted a flat month. P/>"The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month," said Lawrence Yun, chief NAR economist.
However, "significant uncertainty" still clouds the housing market, despite improved affordability conditions, Yun said. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers."
Meanwhile, automakers announced their January vehicle sales, including a 49% decline for
, a 40% decline for
, and a 32% decline for their Japanese rival
. In response, Toyota and Ford added 2.7% and 4.3% in the session, while GM pared sharp early losses to a 1.4% decline by the close.
The housing and auto sales figures also shared the spotlight with a variety of earnings. In one bright spot, drugmaker
reported a $1.64 billion profit, beating expectations, and reaffirmed its expectations for 2009.
-- up 8.2% Tuesday -- posted a fourth-quarter profit that topped estimates as well, but revenue suffered from depressed cholesterol drug sales and a stronger U.S. dollar.
Also, GMAC, the financing arm for
swung to a fourth-quarter profit and said Tuesday that its
financial condition has improved since the government approved its application to become a bank holding company last month, giving it access to government bailout funds, last month.
, for one,
missed analysts' estimates for the fourth quarter, as earnings fell 22%, and the parcel shipper offered a gloomy take on the remainder of 2009.
Likewise, struggling phonemaker
missed lowered profit guidance, suspended its dividend and set first-quarter targets below analysts' expectations.
UPS managed to rise 6%, despite declining profits, but Motorola shares gave up 11% to $4.04.
One of the world's largest chemical makers,
a larger-than-expected fourth-quarter loss on restructuring costs and sagging global demand.
In other Dow Chemical news, the company, which didn't meet the deadline for a proposed $15.4 billion deal with
Rohm & Haas
last month, is being sued by Rohm & Haas, which is asking a court to force the deal to close. Such a move would cause "irreparable harm" according to a Dow statement.
Also Tuesday, British oil company
swung to a $3.3 billion fourth-quarter loss on falling oil prices. Due to declining prices, BP, on average, sold oil and gas for 37% less than it did in the year-earlier period.
Northrop Grumman Corp.
also posted a fourth-quarter loss, impaired by a $3.06 billion charge as it wrote down devalued acquisitions in its shipbuilding and space operations.
Dow added 2.7%, BP ticked up 1.7%, and Northrop tacked on 4.3% for the day.
Taking a look at commodities, crude oil rose 37 cents to settle at $40.41 on Friday. Gold lost $14.50 to settle at $892.50.
Longer-dated Treasuries were recently falling; the 10-year note was giving up 1 11/32 to yield 2.9%, the 30-year was dropping 3 21/32, yielding 3.7%.
The dollar was weaker against the pound, euro, and stronger against the yen.
Stocks in Europe traded higher, with the FTSE in London and the DAX in Frankfurt up a more than 2% apiece. In Asia, however, Japan's Nikkei ended 3% and Hong Kong's Hang Seng closed in the red.