Indices finished near session highs and with solid gains despite another sharp rise in oil Tuesday. The Dow Jones Industrial Average rose 117.54 points (+0.87%), Standard & Poor's 500 index increased 18.10 points (+1.20%), and the Nasdaq finished up 30.00 points (+1.07%). Volume on the NYSE basically matched Monday's tally at 1.5 billion shares, and advancers beat decliners by a ratio of about 2:1.
Commodities grabbed the attention Tuesday, as crude jumped $2.34 to $96.32/barrel and gold gained $14.90 to $825.70, an all-time high. Valero (+3.4%) reported lower profits than last year because of shrinking profit margins, but still beat analysts' expectations (full story). Outside of the hard assets, IndyMac (-2.2%), the nation's second largest lender also reported earnings, but it came in with much wider losses than expected, and announced that it would cut its dividend by 50% (full story). Sun Microsystems (-9.76%) fell after disappointing sales figures in its quarterly report (full story). Nortel (+17.8%) swung a profit and investors were please with the company's margins (full story).
With commodities outperforming, the energy (+2.7%) and materials (+2.5%) sectors posted gaudy gains. Financials (+1.7%) bounced back nicely from Monday as well. The 10-Year U.S. Treasury increased its yield slightly to 4.35%. The U.S. dollar fell against every major currency except the yen. It reached an all-time low against the euro.
Productivity and Cost (8:30 AM) and Wholesale Trade (10:00 AM) are scheduled to be released Wednesday. Cisco Systems is expected to report Wednesday after the close as well. Shares of the company were up 3.1% in anticipation.
Commentary: Avoid the U.S. Until the Subprime Mess Really Hits the Fan • Gold is at $800: Why Isn't Silver at $40?
Stocks to watch: JAVA, IMB, VLO, NT, CSCO