Stock-market bulls had another enriching mix of good news Tuesday: low inflation and further signs of stable economic growth.

Moreover, anticipation of solid earnings from technology bellwether

Intel

(INTC:Nasdaq), which reported after the close, bolstered the good mood on Wall Street. Intel reported fourth-quarter earnings of $2.13 a share, well above analysts' expectations of $1.84 per share as tracked by

First Call

. The robust number more than doubled last year's fourth-quarter earnings of $.98 cents per share.

The

Dow Jones Industrial Average

climbed 53.11 to a record 6762.29, the measure's sixth record in seven sessions. Other measures also set records: the

Nasdaq Composite Index

surged 15.45 to 1346.36 and the

S&P 500

rose 9.35 to 768.86. The

Russell 2000

, which measures small-cap stocks, lost 0.03 to 362.28.

The

Consumer Price Index

rose just 0.3% in December, as expected. Excluding food and oil prices, the CPI tacked on a tepid 0.1%. That cheered fixed-income investors, who pushed the benchmark 30-year Treasury bond up 1 point, and the yield fell to 6.77%.

"When the CPI came out everybody sighed a sigh of relief," said Stanley A. Nabi, vice chairman and chairman of the investment policy committee at Wood, Struthers & Winthrop, a unit of

Donaldson Lufkin & Jenrette

(DLJ:NYSE).

The tame-inflation news suited bank stocks, too, which are sensitive to interest rates. In addition, banks are reporting strong fourth-quarter earnings, leading investors to bet that even those that have yet to report will also disclose strong performances.

Southern National

(SNB:NYSE) increased 1 1/8 to 36 1/2 after it reported that fourth-quarter earnings rose to 72 cents a share from 64 cents a share a year ago.

Star Banc

(STB:NYSE) was up 2 1/4 to 95 1/4 after it said it earned 48 cents a share, compared with 40 cents a share a year ago. Other banks also went along for the ride.

Wells Fargo

(WFC:NYSE) jumped 5 7/8 to 282 3/8.

Citicorp

(CCI:NYSE) climbed 3 7/8 to 104 1/4.

In other bank news,

Barnett Banks

(BBI:NYSE) was up 7/8 to 41 3/4 after it said it reached an agreement to acquire

Oxford Resources

(OXFD:Nasdaq) for $570 million in stock. Oxford climbed 3 1/8 to 36 1/2.

Technology stocks played tag along with Intel. It closed at 147 1/8, up 1/4, ahead of its earnings report.

Gateway

(GATE:Nasdaq) rose 3 7/8 to 56.

Dell Computer

(DELL:Nasdaq) climbed 4 to 65 3/8. And

Microsoft

(MSFT:Nasdaq) was up 1 1/2 to 85 3/8.

After the bell,

Bay Networks

(BAY:Nasdaq) reported terrible earnings for the quarter ended Dec. 31. While the Street had expected 24 cents per share, according to First Call, Bay actually reported a loss of 90 cents per share. That figure included $1 of charges related to two acquisitions and a consolidation of its product line.

But in after-hours trading, Bay was trading at 22 3/4, having closed the day at 22. Some traders said the firm's deal to help build a 50-city Intranet in China helped assuage investors irritated with the quarterly earnings.

The networking equipment sector as a whole performed well today--

Ascend

(ASND:Nasdaq) gained 1 3/4 to 70 3/8;

Cisco

(CSCO:Nasdaq) climbed 2 7/8 to 72 1/8; and

3Com

(COMS:Nasdaq) added 3 1/4 to close at 74 3/8.

Among other stocks,

Ford

(F:NYSE) rose 1/2 to 33 3/4. The comapny said it would sell its Budget care rental unit to

Team Rental

(TBUD:Nasdaq). Team Rental slipped 1/4 to 23.

Lone Star Steakhouse's

(STAR:Nasdaq) earnings increased to 56 cents a share from 42 cents a share. The company's stock climbed 1 1/4 to 26 7/8.

The big gains of most stocks, however, are making some observers queasy. "At the moment, the feeling is this is kind of a paradise on earth forever," Nabi says. "There's a feeling that the Fed won't act." But Nabi adds that "if the economy continues to show strength I don't think the bond market will take it very kindly."

By Erle Norton

enorton@thestreet.com