Buoyed by Financials, U.S. Stocks Climb out of Hole

U.S. stock indices turned positive on Tuesday on the back of strong performances from financials.

The S&P 500 Index rose 9.83 points, or 0.82 percent, to trade at 1,210.69 at 11:56 a.m. ET. The Dow Jones Industrial Average climbed 62.78 points, or 0.55percent, to trade at 11,459.78. The Nasdaq Composite rallied 0.69 percent.

Goldman Sachs (NYSE:GS) reported its second quarterly loss ever as a public company. Its results were also below analyst expectations.

However, Goldman shares, down over 40 percent for 2011, already reflect very pessimistic assumptions. The market therefore weighed its earnings report favorably and bid up Goldman shares by 2.26 percent.

Bank of America (NYSE:BAC), whose shares have similarly been battered in 2011, posted profits that exceed analyst expectations. However, much of the profits came from accounting gains and asset sales.

Nevertheless, the market viewed the report as a positive and bid up Bank of America shares by 7.30 percent.

IBM (NYSE:IBM), which (like many other tech stocks) have performed well in 2011, reported earnings that beat estimates but sales that narrowly missed them. The earnings report disappointed the heightened expectation of investors and IBM shares plunged 4.93 percent.

Macroeconomic news was mixed on Tuesday.

China reported a third quarter GDP growth rate that fell to the slowest pace since 2009. U.S. homebuilder sentiment for October and U.S. wholesale prices for September, however, handily exceeded expectations.