U.S. stocks rose on Tuesday after several fourth-quarter earnings reports and outlooks came in higher than expected, putting the S&P 500 index on track to snap three straight sessions of declines.
Stocks have rallied in recent weeks in part on optimism about stronger corporate profits, with the S&P up nearly 8 percent since the start of December.
However, the benchmark S&P 500 had lost ground over the past three sessions, leading some analysts to question whether stocks had become expensive or if the pullback meant stocks would climb again as earnings news rolled in.
Sears Holding Corp
Homebuilder Lennar Corp
The earnings this quarter should be pretty decent. The question is how much of it was already discounted, that is going to be the real question, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
The first companies to report will have coattails and lift the market overall, but ultimately in the end, the negative here is that we've come a long way since September.
The Dow Jones industrial average <.DJI> rose 63.84 points, or 0.55 percent, at 11,701.29. The Standard & Poor's 500 Index <.SPX> gained 7.32 points, or 0.58 percent, at 1,277.07. The Nasdaq Composite Index <.IXIC> added 11.18 points, or 0.41 percent, at 2,718.98.
Alcoa projected a 12 percent rise in demand for aluminum this year. Some analysts questioned whether the forecast was realistic. Alcoa shares had risen 24 percent since the start of December.
Sears stock gained 6.9 percent to $75.50.
But supermarket chain Supervalu Inc
In economic news, the Commerce Department said wholesale inventories fell 0.2 percent to a seasonally adjusted $425.5 billion. Economists polled by Reuters had expected a 1 percent rise in inventories.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)