Wall Street climbs for second day

Stocks rallied for a second day on Tuesday as better-than-expected earnings calmed investors.

Stocks rallied for a second day on Tuesday as better-than-expected earnings and encouraging data calmed investors after the market8217;s recent sell-off.

Rising sales of previously owned US homes and robust earnings from bellwethers representing consumer and industrial businesses,including Whirlpool Corp and Cummins Inc,pointed to a steady rebound in demand.

8220;The housing data,followed by the ISM data yesterday and the GDP last week,is making investors believe that the strength in the fourth quarter was not a fluke,and that the strength could be sustainable in the first quarter and beyond,8221; said Bruce Bittles,chief investment strategist at Robert W. Baird amp; Co in Nashville,Tennessee.

The home builders received a double jolt of good news. In addition to a 1 per cent gain in December pending sales of existing US homes,D.R. Horton,one of the top five US home builders,reported its first quarterly profit in almost three years. D.R. Horton8217;s stock gained 10.9 per cent to 13.21. The Dow Jones US home construction index rose 6.5 per cent.

The Dow Jones industrial average rose 111.32 points,or 1.09 per cent,to end at 10,296.85. The Standard amp; Poor8217;s 500 Index gained 14.13 points,or 1.30 per cent,to 1,103.32. The Nasdaq Composite Index advanced 18.86 points,or 0.87 per cent,to 2,190.06.

The Samp;P 5008217;s gain was its biggest two-day per centage jump since October 2009,after falling 6.2 per cent in the last three weeks of January.

The day8217;s home sales data followed a string of encouraging economic news,including Monday8217;s data on the US manufacturing sector from the Institute for Supply Management,and Friday8217;s report on the economy8217;s fourth-quarter growth.

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Shares of UPS added 0.4 per cent to 58.62 after the world8217;s largest package shipper by volume reported a drop in fourth-quarter profit,but forecast a sharp increase in 2010 earnings.

Whirlpool Corp gained 8.1 per cent to 82.23 after the appliance manufacturer reported a sharp increase in first-quarter earnings.

Exposure to emerging markets helped major industrial companies Cummins Inc and Emerson Electric Co,post rosy quarterly earnings. Cummins8217; stock rose 8.8 per cent to 51.09,while Emerson8217;s stock jumped 10.1 per cent to 46.77.

The Samp;P 500 industrial sector index gained 1.9 per cent.

Amazon.com Inc slid for a second straight day,falling 0.6 per cent to 118.12 and curbing the Nasdaq8217;s advance. Traders continue to fear that a pricing battle that Amazon lost with book publisher Macmillan could hurt sales volume growth for its Kindle e-reader.

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In testimony before a Senate panel,White House adviser Paul Volcker urged Congress to rein in risky investing by big banks to help prevent them from becoming 8220;too big to fail.8221;

Shares of JP Morgan Chase amp; Co rose 2.3 per cent to close at 40.55 and ranked among the stocks giving the Dow its biggest boost,while Goldman Sachs8217; stock advanced 2.5 per cent to 156.94.

Credit card companies8217; shares rose following a positive broker comment on the sector,with American Express up 2.1 per cent at 39.02,and Capital One Financial up 1.8 per cent at 37.43.

Volume was light on the New York Stock Exchange,with about 1.18 billion shares changing hands,well below last year8217;s estimated daily average of 2.18 billion. But on the Nasdaq,about 2.50 billion shares traded,above last year8217;s daily average of 1.63 billion.

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Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 4 to 1,while on the Nasdaq,about five stocks rose for every four that fell.