NEW YORK (CNN/Money) - Stocks climbed early Tuesday as strong quarterly earnings from two large Wall Street banks helped cheer investors looking for a traditional 'Santa Claus' rally.

The Dow Jones industrial average (up 37.24 to 10,698.84, Charts) rose about 0.3 percent, while the broader Standard & Poor's 500 (up 4.35 to 1,199.00, Charts) index posted a similar gain.

The Nasdaq composite (up 11.88 to 2,139.73, Charts) added about 0.5 percent in the early going.

Before the bell, two of Wall Street's leading investment houses posted earnings that far outpaced analysts' expectations.

Morgan Stanley (down $0.26 to $53.39, Research) reported that earnings jumped 18 percent in the latest quarter, helped by growing investment banking activity and record results in its fixed-income business. The results topped analysts' forecasts, though the shares hovered near unchanged.

Bear Stearns (up $1.82 to $106.32, Research), meanwhile, delivered profits of $2.61 a share, up from $2.19 a share a year earlier. Analysts were expecting $2.14 a share. Bear Stearns stock pushed slightly higher.

In other corporate news, Barry Diller's IAC/InterActive Corp. (up $2.67 to $28.55, Research) announced plans to spin off its online travel service, Expedia.com, and other travel-related businesses such as Hotels.com, into a company called Expedia.

IAC will hold onto a host of other e-commerce and services businesses, and its shares rallied at the open.

Shares of Intel also rose after Lehman Brothers upgraded the chipmaker to overweight from equal-weight Tuesday. Lehman kept its $27 target price on the stock. Intel (up $0.39 to $23.09, Research) climbed 1.7% in early action.

Treasuries edged lower, raising the yield on the 10-year note to 4.20 percent from 4.18 percent late Monday. Bond prices and yields move in opposite directions.

In currency markets, the dollar inched higher against the Japanese yen and was little changed versus the euro.