Stocks gain on earnings, deals

February 17, 2010 at 12:00a.m.

NEW YORK (AP) — Signs that the economy is indeed strengthening gave investors a surge of optimism and sent stocks sharply higher.

The Dow Jones industrials soared almost 170 points Tuesday on upbeat earnings reports and corporate deals. Investors who have been anxious in recent weeks about economic problems overseas were able to put aside their concerns for the time being. They focused instead on the domestic economy.

The dollar fell as investors felt less of a need to stash their money in safer investments. Oil, gold and other commodities joined stocks as the beneficiaries of the market’s renewed confidence. And the stocks of energy and materials producers were among the day’s big winners.

European markets also rose following new plans by European Union leaders to push Greece to get its budget under control. European officials gave Greece one month to prove it can cut its deficits. Debt problems in European countries including Greece, Portugal and Spain have been a major factor behind weakness in global stock markets in recent weeks.

A strong earnings report from Barclays, a major European bank, also gave the market some relief. European banks have been slower to recover than their U.S. counterparts, and investors saw the bounceback at Barclays as an encouraging sign.