Nasdaq gains, Dow hits new high

NEW YORK (CNNMoney.com) -- The Nasdaq composite led a broader stock market advance Tuesday, as investors welcomed a merger in the satellite radio industry, strength in retail and gains in select tech shares.

The tech-fueled Nasdaq (up 16.45 to 2,512.76, Charts) composite added 0.7 percent, with around 45 minutes left in the session.

The Dow Jones industrial average (up 23.64 to 12,791.21, Charts) added 0.2 percent, touching a fresh trading high and flirting with a fresh record high.

The broader S&P 500 (up 4.24 to 1,459.78, Charts) index gained 0.2 percent.

The Russell 2000 (up 8.49 to 826.64, Charts) small-cap index gained 0.7 percent.

The major gauges rallied last week, though stocks lost some steam Friday ahead of the long holiday weekend. Financial markets were closed Monday for Presidents' Day.

Tuesday started off on a negative note as investors back tracked after last week's run. But the tone improved by midday, with the Nasdaq composite taking the lead.

"Retailers have been strong today, with Wal-Mart the standout," said Joseph Saluzzi, co-head of equity trading at Themis Trading.

Wal-Mart Stores (up $1.47 to $49.95, Charts) reported higher quarterly earnings that topped forecasts on sales that missed estimates. The retailer also issued upbeat current-quarter forecasts. Shares gained 3 percent.

Additionally, Home Depot (down $0.10 to $41.34, Charts) recovered from a morning selloff, after the home improvement retailer reported lower quarterly earnings that missed estimates Tuesday.

Investors also welcomed a merger in satellite radio. Sirius Satellite Radio (up $0.25 to $3.95, Charts) and XM Satellite Radio (up $1.72 to $15.70, Charts) announced a merger of equals Monday that would value the combined company at roughly $13 billion. (Full story).

Sirius shares jumped nearly 7 percent and XM Satellite shares gained 13 percent in active Nasdaq trade, although there was some doubt about whether regulators would approve the deal. (Full story).

The satellite radio industry was not the only one to see consolidation Tuesday.

Additionally, Vulcan Materials (down $0.80 to $111.01, Charts), which makes highway construction products, said Tuesday it would buy Florida Rock Industries (up $19.59 to $66.55, Charts) in a $4.6 billion cash and stock deal.

Vulcan shares were little changed, while Florida Rock shares jumped 42 percent.

Apple (up $1.06 to $85.89, Charts), Amazon.com (up $1.08 to $41.41, Charts) and Google (up $1.76 to $471.70, Charts) were among the heavily-traded technology stocks boosting the Nasdaq.

JetBlue (down $0.64 to $12.92, Charts) shares slumped 5 percent after the air carrier's CEO announced an overhaul - after last week's operational fiasco caused by bad weather - that could cost the company several million dollars.

Additionally, Morgan Stanley downgraded the stock.

Market breadth was positive. On the New York Stock Exchange, losers beat winners by nine to seven on volume of 870 million shares. On the Nasdaq, advancers topped decliners three to two on volume of 1.63 billion shares.

U.S. light crude oil for March delivery tumbled $1.49 to $57.90 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery fell $11.80 to $661 an ounce.

While the decline in commodity prices was a boon for investor sentiment, it also dragged on oil and gold stocks, which in turn limited the advance for the broader market.

Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 4.68 percent from 4.70 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and the yen.

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