NEW YORK – Stocks rose Tuesday, helped by a surge in American Express shares, strong earnings news and a slight drop in crude prices.
The Dow Jones industrial average (search) was up 62 points, or 0.59 percent, at 10,551.94. The Standard & Poor's 500 Index (search) was up 8.14 points, or 0.69 percent, at 1,189.41. The Nasdaq Composite Index (search) was up 6.29 points, or 0.30 percent, at 2,068.70.
It marked the second consecutive day of gains for the three indexes, which had a poor start to the year and ended January lower.
"The market had sold off quite a lot earlier this year, but earnings reports for the fourth quarter have been basically OK," said Christine Callies, managing director and chief market strategist for Bessemer Trust. "I think investors have been doing a little bargain-hunting in the last few days."
American Express (AXP), the global credit card and travel services company, surged 6.4 percent, or $3.40, to $56.75 after announcing plans to spin off its financial advisory business to its shareholders and focus on its charge and credit card, payments processing and travel businesses.
After the closing bell, Web search company Google Inc. (GOOG) rose more than 4 percent in extended-hours trading after it posted a higher quarterly profit.
Exxon Mobil Corp. (XOM), the world's largest publicly traded oil company, rose $1.67 to $53.27 after it posted the biggest quarterly profit ever for a U.S. company, driven by high crude oil and natural gas prices.
Wall Street expects the Federal Open Market Committee (search) to raise short-term interest rates by another 0.25 percentage point at the conclusion of its two-day meeting Wednesday. The statement that accompanies the decision will also be closely examined for clues about what lies ahead. Worry about the Fed meeting kept some investors on the sidelines, but trading was still brisk — a fact analysts found encouraging after January's steep declines.
"I think what we've got here is a market that looks like it's on the mend," said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis. "To me, you can only say the surprises in the economy and in earnings have been positive this year. Of course, there are some participants who won't do anything until they see what the Fed is going to do."
Economists were somewhat disappointed by the Institute for Supply Management's (search) report on manufacturing. The private research group's index of manufacturing activity affirmed the rebound at the nations' factories, but not at the pace economists expected. The reading came in at 56.4, down from a revised 57.3 in December, and just under forecasts of 57.
Oil prices, which have stayed uncomfortably high despite the relative success of weekend elections in Iraq and OPEC's decision to maintain its current production target, declined slightly amid concerns that the oil cartel might lower targets in the near future. Crude futures settled down $1.08 at $47.12 on the New York Mercantile Exchange (search).
In post-close action, Google rose $8.34 to $200.24 on the Inet electronic brokerage, up from its $191.90 close. "Revenue is well ahead of anybody's expectations," said Barry Randall, portfolio manager of the $100 million First American Technology Fund.
"They appear to have beaten on the top and bottom lines perhaps even the most optimistic expectations," he said.
The Walt Disney Co. (DIS) added 17 cents to $28.80 after increased revenue from cable channels and a boost in attendance at its theme parks helped it produce higher-than-expected profits, overcoming lower income at its film studio and in its consumer products division. The company said it continues to expect double-digit earnings growth this year and through 2007.
Among the day's decliners, Tyco International Ltd. (TYC) lost 4.5 percent, or $1.63, to $34.51, after the conglomerate reported a 1.4 percent drop in quarterly profits as charges for early retirement of debt and divestitures outweighed surging sales. Excluding the charges, earnings matched Wall Street forecasts.
Medical device maker Boston Scientific Corp. (BSX) 5.3 percent, or $1.75, to $34.81, after beating per-share earnings estimates by a penny thanks to a sharp rise in sales of coronary stents, which more than offset one-time charges from stock option modifications and a change in tax law.
MGM Mirage Inc. (MGG), gained 2.8 percent, or $1.98, to $73.79, after the owner of the Bellagio and MGM Grand casinos posted lower fourth-quarter earnings due to hefty gains in the year-ago period. But strong customer spending and significant room rate increases helped boost profit above Wall Street expectations. Revenues rose 11 percent, and the company reiterated its forecast for the current quarter.
The Russell 2000 index, which tracks smaller company stocks, was up 4.12, or 0.66 percent, at 628.14.
Overseas, Japan's Nikkei stock average shed 0.03 percent. In Europe, France's CAC-40 rose 0.65 percent for the session, Britain's FTSE 100 added 1.11 percent and Germany's DAX index was up 0.59 percent in late trading.
Reuters and the Associated Press contributed to this report.