U.S. Stocks rose Tuesday as investors economic worries were consoled with the European Central Bank's $500 billion injection along with profit gains at Goldman Sachs and Best Buy.
The European Central Bank along with the Bank of England offered funds to banks at 4.21 percent interest rates in a bid to prevent global recession. The ECB loaned $501.5 billion (348.6 billion euros) for two weeks to banks to bring down the cost of money by year's end.
The BoE loaned banks $20 billion (10 billion pounds) for three months, after the U.S. Federal Reserve on Monday auctioned off $20 billion in 28-day credit. The injection from the world's central banks serve to revive demand in struggling areas of the credit market, but failed to stimulate a market that remains anxious that the economy will fall again.
A report from the Commerce Department showed the housing sector continued to look grim. Housing starts in the U.S. dropped 3.7 percent and permits for future construction slid to a 14-year low, leaving builders rushing to reduce inventories of unsold homes.
Amidst the continued trouble in the credit markets, Goldman Sachs posted a 2.2 percent gain this morning, in fiscal fourth-quarter earnings, following pessimistic bets on the mortgage market. The company's shares fell 3.4 percent to $201.51, as investors worried about the overall dismal outlook for the economy and markets.
Electronics retailer Best Buy posted third-quarter profit and sales ahead of Wall Street expectations.
The company's net income was $228 million, or 53 cents a share in the Q3 and revenue jumped 17 percent to $9.9 billion in the quarter. Analysts polled by Thomson Financial have forecast earnings of 41 cents on revenue of $9.4 billion.
The Dow Jones industrial average rose 65.27, or 0.50 percent, to 13,232.47, after gaining as many as 112 points. The Standard & Poor's 500 index rose 9.08, or 0.63 percent, to 1,454.98, and the Nasdaq composite index rose 21.57, or 0.84 percent, to 2,596.03.