Blue-chip earnings push markets higher

The markets rebounded
after a rough stretch last week.

NEW YORK (AP) — Wall Street ended an erratic session with a big advance Tuesday as investors uneasy about the economy were reassured by solid earnings from blue-chip names including Apple Inc. and American Express Co. The Dow Jones industrial average rose more than 100 points.

Technology stocks were among the biggest gainers after Apple surpassed analysts’ expectations with a 67 percent jump in fiscal fourth-quarter profit on strong sales of Macintosh computers, iPods and iPhones. Two component companies of the Dow Jones industrial average — American Express, one of the largest credit card companies, and chemicals maker DuPont Co. — posted better-than-expected profit gains as well.

But comments from DuPont CEO Charles O. Holliday Jr. that the company doesn’t expect a recovery in the housing market next year reminded investors of the still uneasy forecasts for the economy. Holliday’s remarks helped pull the major indexes down from their session highs before the indicators rebounded in afternoon trading.

“Housing is obviously still a big concern, and the question is how much does it spill over into the rest of the economy,” said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. “I think the trend for the market is down unless investors see something positive, and the market drifts back up again.”

He said investors were also adjusting their positions ahead of key housing data this week. On Thursday, the National Association of Realtors will release its existing home sales report, and the Commerce Department reports new home sales a day later.

According to preliminary calculations, the Dow rose 109.26, or 0.81 percent, to 13,676.23.

Broader stock indicators also had solid gains. The Standard & Poor’s 500 index rose 13.26, or 0.88 percent, to 1,519.59; the Nasdaq composite index rose 45.33, or 1.65 percent, to 2,799.26.

The stock market had a fitful recovery Monday after plunging Friday. Wall Street had sold off for five straight sessions as worries about the credit market’s effect on the economy escalated, when several blue-chip companies offered dimmer-than-anticipated outlooks and S&P downgraded more mortgage-backed securities.

Higher energy prices and a weakening dollar are also hanging over the market. Treasury Secretary Henry Paulson said in a speech Tuesday that China must allow its currency, the yuan, to gain in value more quickly, to counter imbalances in the economy and make monetary policy more effective in responding to inflation.