NEW YORK (CNN/Money) -
Stocks posted their best gains of the new year Tuesday as solid blue-chip earnings reassured investors wary after a three-week selloff.
The Dow Jones industrial average (up 92.95 to 10,461.56, Charts) jumped about 93 points, its biggest one-day point advance since Dec. 21.
The broader Standard & Poor's 500 (up 4.66 to 1,168.41, Charts) index rose 0.4 percent and the Nasdaq composite (up 11.38 to 2,019.95, Charts) added around 0.6 percent.
All three indexes closed well off their highs, having peaked in the early afternoon.
Treasury bonds tumbled as investors yanked funds from the perceived safety of government debt and plowed it into stocks. The dollar rallied, and gold tumbled along with other dollar-traded commodities.
The major gauges closed lower in each of the first three weeks of the year, the first time the Dow has done that since 1982, according to Ned Davis Research.
Stocks also sold off Monday, all of which set stocks up for a bounce Tuesday, supported by the earnings.
"It's been a really tough month," said David Briggs, head of equity trading at Federated Investors. "Fundamentally, nothing has changed, but we're probably due for a little pop."
Gains covered a variety of stock sectors, with 24 out of 30 Dow components rising.
"The question is whether this is a one-day thing after all the selling or if it's something more sustainable," said Tim Heekin, head of stock trading at Thomas Weisel Partners.
Briggs said that Monday's decline probably represented a short-term bottom for the market and increased bargain hunting could give stocks an extended boost for a few more days.
Longer term, Thomas Weisel's Heekin said, "I tend to think that, unfortunately, we still have more work to do on the downside."
Among the companies reporting results early Tuesday, two Dow components released better-than-expected earnings and another reported in-line results.
Also helping the rally: solid readings on consumer confidence and existing home sales, which even though they fell in December set a record for the full year.
Nonetheless, the major gauges remain decidedly lower for the year. As of Tuesday's close, the Dow is down 2.9 percent in 2005, the S&P is down 3.6 percent and the Nasdaq is down 7.1 percent.
After the close, Texas Instruments (Research) reported earnings of 28 cents per share, a penny shy of a year ago, and two cents more than expected, according to First Call estimates. The chipmaker's board also approved the $2 billion in stock buybacks. Shares inched higher in after-hours trade.
Wednesday morning earnings include Eli Lilly (Research) and Dow component SBC Communications (Research). Eli Lilly is expected to post earnings of 74 cents, according to First Call estimates, up from 67 cents a year ago. SBC is expected to have earned 33 cents, a penny shy of a year ago.
Johnson & Johnson (up $2.23 to $63.72, Research) reported a profit of 67 cents a share, up from a year earlier and more than analysts surveyed by First Call were expecting. The drugmakers' shares rallied 3.6 percent.
DuPont (up $0.57 to $46.58, Research) reported earnings of 37 cents a share, 4 cents more than expected. Shares rose 1.2 percent.
Fellow Dow component Merck (up $1.10 to $30.95, Research) reported earnings of 50 cents per share, down from a year earlier, due to the withdrawal of its blockbuster pain killer Vioxx last fall. But the results were in line and the stock rose nearly 3.7 percent.
Merrill Lynch (up $1.19 to $57.99, Research) also reported earnings that topped estimates. The brokerage earned $1.19 per share, versus forecasts for a profit of $1.10 per share.
Among other movers, shares of Corio (up $0.73 to $2.78, Research), a software management services firm, rallied more than 35 percent on news that it has accepted a buyout offer from IBM (up $0.40 to $92.19, Research), valued at roughly $182 million in cash.
Oracle (up $0.35 to $13.59, Research) also rose on a Lehman Brothers upgrade to "overweight" from "equal weight," with the brokerage citing its successful buy of PeopleSoft. Lehman noted the software maker's stock has fallen since the buy, making it attractive.
Among other tech movers, chips were particularly strong. The Philadelphia Semiconductor (up 6.83 to 389.87, Charts) index, or the SOX, rose 1.8 percent.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by almost nine to seven on volume of 1.26 billion shares. On the Nasdaq, advancers topped decliners by 8 to 7 on volume of 1.59 billion shares.
On the economic front, consumer confidence rose to 103.4 in January, the Conference Board said, up from an upwardly revised 102.7 in December. Economists surveyed by Briefing.com thought confidence would fall to 101.5.
Existing home sales fell to a 6.69 million unit annual rate in December, versus a downwardly revised 6.92 million unit rate in November. Economists surveyed by Briefing.com thought sales would fall to a 6.80 million unit annual rate for December.
U.S. light crude oil for March delivery rose 83 cents to settle at $49.64 a barrel on the New York Mercantile Exchange.
Treasury prices plunged, pushing the yield on the 10-year note up to 4.19 percent from 4.13 percent late Monday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar jumped versus the yen and rose more modestly against the euro.
COMEX gold fell $5 to settle at $422.10 an ounce.