NEW YORK – Stocks surged in a see-saw session Tuesday amid a flood of rather negative second-quarter earnings reports. Blue chips extended their gains thanks to some companies whose deteriorating results still managed to meet or beat analysts' estimates.
``No one is saying this is the worst it's going to be,'' said Charles Payne, analyst at Wall Street Strategies. ``The key is, though, that more and more companies are actually telling us it will get better. A couple of months ago, they couldn't even do that, so that is being viewed as a positive.''
The Dow Jones industrial average gained 134.27 points to end the day at 10,606.39 after plunging at the open, while the technology-dominated Nasdaq Composite Index ended up 38.20 points at 2,067.32.
The broader Standard & Poor's 500 Index rose 11.99 points at 1,214.44.
After the closing bell, marquee technology names like Intel Corp., Veritas Software Corp. and Apple Computer Inc. issued forecasts that ranged from tepid to downright gloomy -- casting a cloud over Wall Street. Tech stocks slipped in after-hours trading.
Investors will be tuned in for Federal Reserve Chairman Alan Greenspan's key address to Congress on Wednesday. The central banker is expected to express optimism that the economy is stabilizing, although promises of further interest- rate cuts are likely to be absent, analysts said.
Helping the Dow was a big gain in component Caterpillar, the world's largest maker of construction equipment, which said earnings slid 14 percent, but still beat estimates. Caterpillar rose $3.18 to $53.55.
Among those spreading optimism was Maytag Corp., the No. 3 U.S. home appliance maker. It posted a 66 percent drop in earnings before the effect of an accounting change as sales of vacuum cleaners and floor care products slumped, but also said third-quarter earnings would show some improvement. Maytag shares climbed 69 cents to $31.90.
Whirlpool Corp., the No. 1 U.S. maker of home appliances, also rose, shrugging off a 22 percent drop in earnings caused by soft spending on major appliances around the globe. The company said it expected strong improvement in the third and fourth quarters. Whirlpool rose $3.10 to $71.19.
Intel, the world's largest semiconductor maker, beat quarterly earnings estimates, but its wide sales forecast disappointed some investors. Its shares fell to $29.32 in after-hours trading from Tuesday's close of $29.90.
Data management software maker Veritas Software Corp. plunged in extended-hours trading after it cut its annual growth target amid a prolonged slump in corporate technology spending. Personal computer maker Apple slid after it hinted revenue for the second half of its fiscal year might fall short of estimates.
The world's largest forest products company, International Paper, also beat estimates despite an 80 percent drop in quarterly earnings. The stock climbed 77 cents to $39.
Photography giant Eastman Kodak Co., which is one of the 30 corporate icons that make up the Dow average, met expectations by reporting a 36.6 percent drop in profits, reflecting weaker sales of cameras and film. It even warned the sluggish economy could continue to affect operations in the third quarter, but investors shrugged off the news and its shares rose $1.33 to $46.03.
Even chip maker Novellus Systems Inc., which posted a 24 percent drop in income, managed to shake off its grim results. The company's chief executive said there is ''significant uncertainty'' in the semiconductor industry amid weak demand for computers and telecommunications gear. Its shares climbed $2.48 to $48.85.
``A lot of the damage is already reflected in stock prices,'' said Alfred Kugel, senior investment strategist at Stein Roe & Farnham, which is part of the $70 billion Liberty Funds Group.
General Motors, a Dow component, posted a 74 percent drop in earnings to $477 million as lower U.S. vehicle sales and losses from overseas operations took their toll on the world's largest automaker. GM fell $1.05 to end at $65.99.
Pharmaceuticals giant Johnson & Johnson, another Dow stock, climbed $1.18 to $54.91 after taking a beating in early trading. The company's profits rose, but it missed Street forecasts.
Despite investors' apparent optimism over the earnings so far, some analysts say there may not be enough evidence of a pickup yet to get too optimistic about a rebound in stocks.
``We always beat the estimates. The critical question is: Do we beat them by more or less than me normally do? We have no reason to expect in this environment we would beat them by more than normal,'' said Chuck Hill, research director at Thomson Financial/First Call.
Although the earnings that have come in so far have beaten estimates by an average of 2.3 percent, that is still well below the average 3.0 percent by which S&P 500 companies have exceeded forecasts over the past seven years, Hill said.
Companies in the S&P 500 are expected to post an average drop in profits of 18 percent for the second quarter, with about 20 percent of them having now reported their results, according to Thomson Financial/First Call.
Advancing issues led decliners nearly 3 to 2 on the New York Stock Exchange. Consolidated volume came to 1.43 billion shares, ahead of 1.23 billion shares Monday.
The Russell 2000 index rose 6.77 to 490.57.
Overseas, Japan's Nikkei stock average dropped 1.7 percent. Germany's DAX index slipped 0.1 percent, Britain's FT-SE 100 lost 1.6 percent, and France's CAC-40 fell 0.9 percent.
-- Reuters and the Associated Press contributed to this report.
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