Updated from 4:08 p.m. EDT
Stocks closed solidly higher Tuesday as Wall Street harvested another crop of generally sound earnings and economic news.
added 8.77 points, or 0.71%, to 1244.12, and the
gained 22.77 points, or 1.04%, to 2218.15 -- both reaching four-year closing highs. The
Dow Jones Industrial Average
rose 60.59 points, or 0.57%, to 10,683.74. The 10-year Treasury was down 5/32 to yield 4.33%, while the dollar fell against the yen and euro.
"There's been good news but the price of oil is disappointing us," said Edgar Peters, chief investment officer with Pan Agora. "Today we got a bit of reprieve, giving us a good tone. There continues to be issues with oil, regardless of the positive economic data and earnings news, but overall things looked pretty good today."
The Dow was supported by
, which gained 3.4%, and
, up 3.1%.
was the weakest component on the Dow, falling 1.1%.
"With many market averages
above the four-year highs set last week, this rally is worth watching," said Ken Tower, chief market strategist with CyberTrader. Still, Tower cautioned, today's gains could spark tomorrow's pullback.
"Should this rally continue, it could be a warning that the typical September selloff will start early," he said.
Oil prices, which briefly touched a record $62.30 a barrel in New York Monday, closed at another record high. The September contract finished Tuesday's session up 32 cents to $61.89 a barrel. The death of King Fahd continues to sow nervousness in the market as traders wonder about future power transfers in Saudi Arabia.
Peters added that "despite the fact oil has been so high for a while, there hasn't been an extreme impact on the economy. People do fear it, which does hold us back a little, but the good news continues to shine through."
In corporate news,
withdrew its $18.5 billion bid for
, clearing the way for
to acquire the company. Brokerage Bear Stearns upgraded Cnooc to outperform from peer-perform on the news, stating that the market should now be looking at its operational strengths.
On the economic front, the Commerce Department said personal income rose 0.5% in June, while consumer spending was up 0.8%, the biggest gain in spending since December. Both figures were in line with economists' forecasts.
Separately, the Commerce Department said factory orders for June rose 1.0%, matching expectations after a 2.9% rise in May.
"The economic data so far has been coupled with good earnings news, helping the anxious market move higher," said Peter Cardillo, chief market analyst with S.W. Bach & Co. "The curveball has been the record price of oil, making investors somewhat cautious. Nevertheless, the buyers are still pushing us to the upside."
Stocks ended mixed Monday on oil's spike and a better than expected report on the U.S. factory sector. The Dow Jones Industrial Average fell 0.2% to 10,623, while the Nasdaq Composite added 0.5% to 2195.
Stronger sectors Tuesday included energy, utilities, health care, technology and semiconductors. Industrials and software were performing weaker.
said third-quarter earnings rose 29% from a year ago to $1.19 billion, or 56 cents a share, while adjusted earnings of 50 cents a share were a penny ahead of estimates. The stock slid, however, on weak fourth-quarter guidance and a downgrade from the brokerage Wachovia. Tyco closed lower by $2.96, or 9.6%, to $27.86.
said its second-quarter loss widened to $177.5 million, or 13 cents a share, from $136.8 million, or 11 cents a share, last year. The satellite radio provider's sales nearly quadrupled to $52.2 million.
Analysts were forecasting a loss of 15 cents a share on sales of $50.1 million. Sirius said it added 365,931 subscribers in the quarter and raised its estimate of year-end subscribers to 3 million. The company put full-year sales at $225 million, up from its old estimate of $215 million, and set a $400 million bond sale. Sirius lost 20 cents, or 2.9%, to $6.75.
second-quarter earnings rose by 64% from last year to $430 million, or 19 cents a share, on a 10.5% rise in revenue to $5.6 billion. Both lines were ahead of estimates. The stock added 39 cents, or 1.3%, to $31.
posted second-quarter net income of $618.1 million, or 89 cents a share, up from $69.9 million, or 9 cents a share, a year ago. On an adjusted basis, net income rose 23% to $214.9 million, or 30 cents a share, beating the Thomson First Call consensus of 25 cents a share. Revenue rose to $1.96 billion in the quarter from $1.46 billion a year earlier. Shares fell 36 cents, or 1.3%, to $26.41.
posted a second-quarter loss of $164 million, or 9 cents a share, after a loss of $776 million, or 43 cents a share, in the same quarter a year ago. Excluding items, the company lost 7 cents a share. Revenue rose to $3.47 billion from $3.44 billion a year ago. The stock finished unchanged at $3.89.
reported fiscal fourth-quarter net income of $98 million, or 25 cents a share, up from $66 million, or 17 cents a share, a year ago. Analysts forecast earnings of 24 cents a share, according to Thomson First Call. Coach also lifted its 2006 earnings outlook to at least $1.24 a share on sales of nearly $2.1 billion, about 3 cents ahead of the average analyst consensus. Coach was down 80 cents, or 2.3%, to close at $34.75.
On Wednesday, earnings reports are expected from
Electronic Data Systems
In ratings moves, Morgan Stanley upgraded the entire steel sector to in line from cautious, citing improving inventories, production and pricing trends throughout the industry.
all were trading higher on the upgrade.
Traders also were treated to impressive U.S. auto-sales data for July. Results showed an exceptionally strong month, thanks to promotions that gave consumers employee rates on vehicles.
said U.S. sales totaled 366,548 vehicles, a July record. Total sales were up 29% compared with a year ago. For
U.S. arm, the Chrysler Group, total July sales reached 260,937 passenger vehicles, a 25% increase. Ford rose 3 cents, or 0.3%, to $10.88, while DaimlerChrysler was up $1.37, or 2.8%, to finish at $50.74.
said U.S. sales rose 20% in July to 530,027 vehicles. The company said it plans to still pay a third-quarter dividend of 50 cents a share to its stockholders. A dealer for GM confirmed that the automaker will continue its employee price discount plan through Sept. 6. GM lost 33 cents, or 0.9%, to $36.53.
Overseas markets were mostly higher, with London's FTSE 100 adding 0.7% to 5327 and Germany's Xetra DAX up 0.9% to 4933. In Asia, Japan's Nikkei fell 0.1% overnight to 11,940, while Hong Kong's Hang Seng gained 1.1% to 15,137.
To view Gregg Greenberg's video take on today's market, click here