Stock indexes rose after Coca-Cola, I.B.M. and other companies reported better second-quarter earnings. The indexes extended their gains in the afternoon after President Obama backed a proposal by six senators to cut the federal debt by $3.7 trillion over the next decade and raise the $14.3 trillion debt ceiling.
The Dow Jones industrial average gained 202.26 points, or 1.6 percent, to close at 12,587.42. It was the Dow’s largest one-day gain this year.
“It looks like there’s bipartisan support for a robust plan,” said Burt White, chief investment officer at LPL Financial in Boston. “The stock market had been looking for a reason to have a relief rally. And it looks like they got the start of one today.”
The deadlock in Washington over raising the federal borrowing limit and Europe’s debt crisis have weighed on markets this month. The Dow slid in five of the last seven days.
The Standard Poor’s 500-stock index rose 21.29 points, or 1.6 percent, to close at 1,326.73 on Tuesday. The Nasdaq composite index gained 61.41 points, or 2.2 percent, to 2,826.52.
Tuesday’s gains turned the major indexes positive for the month. The Dow and Nasdaq are up more than 1 percent in July. The S. P. 500 is up 0.5 percent.
Information technology stocks led industry groups higher after I.B.M. results beat analysts’ estimates. I.B.M.’s stock rose 5.7 percent.
The tech gains could continue on Wednesday. Apple reported another surge in earnings after the stock market closed as sales of iPhones and iPads again set records. The stock rose more than 5 percent to $397.35 in after-hours trading.
Coca-Cola’s income increased 18 percent in the second quarter on stronger sales overseas. It raised some prices to offset higher ingredient costs. Coca-Cola’s stock was up 3.3 percent.
KeyCorp, the banking company based in Cleveland, rose 4.3 percent after reporting income of 25 cents a share, up from 3 cents a share a year ago.
Harley-Davidson rose 8.9 percent, making it the top performing stock in the S. P. 500-stock index. Harley reported its first increase in United States sales since the last quarter of 2006. An increase in housing construction lifted the stocks of Lennar Homes and D.R. Horton. The Commerce Department said building of houses and apartments increased 14.6 percent in June from May.
Bank stocks were mixed. Wells Fargo Company’s profit soared 29 percent to 70 cents a share on stronger results from lending. The bank’s stock gained 5.7 percent.
Bank of America lost 90 cents a share, more than analysts had expected. Goldman’s earnings more than doubled to $1.85 a share, up from 78 cents a year ago. But a decline in bond trading kept results from reaching the analysts’ estimates of $2.27 a share.
Interest rates were lower. The Treasury’s benchmark 10-year note rose 11/32, to 102 3/32, and the yield fell to 2.88 percent from 2.92 percent late Monday.
Article source: http://feeds.nytimes.com/click.phdo?i=cc0fc83fd7615e1a374c81909e65a5ad