Record-breaking session

NEW YORK (CNNMoney.com) -- The Dow ended at a record high Tuesday for the second straight session, as investors welcomed a merger in the satellite radio industry, strength in retail and gains in select tech shares.

The Dow Jones industrial average (up 19.07 to 12,786.64, Charts) added a few points, closing at a record high for the second session in a row. The blue-chip barometer also hit a record trading high during the session.

The broader S&P 500 (up 4.14 to 1,459.68, Charts) index gained 0.3 percent and closed at a 6-1/2 year high, taking out the previous high from last week.

The tech-fueled Nasdaq (up 16.73 to 2,513.04, Charts) composite added 0.7 percent and closed at its highest point in 6 years, taking out its previous record from January.

The Russell 2000 (up 7.96 to 826.11, Charts) small-cap index gained 1 percent and closed at an all-time high.

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.

After the close Tuesday, Dow component Hewlett-Packard (up $0.36 to $43.13, Charts) reported quarterly sales and earnings that rose from a year ago and topped estimates. The company also forecast fiscal-year 2007 sales and earnings in a range that beats analysts' forecasts.

Wal-Mart Stores (up $1.78 to $50.26, 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.

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

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 $0.22 to $3.92, Charts) and XM Satellite Radio (up $1.43 to $15.41, Charts) announced a merger of equals Monday that would value the combined company at roughly $13 billion. (Full story).

Sirius shares jumped nearly 6 percent and XM Satellite shares gained 10.2 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.

Vulcan Materials (down $0.67 to $111.14, Charts), which makes highway construction products, said Tuesday it would buy Florida Rock Industries (up $19.58 to $66.54, Charts) in a $4.6 billion cash and stock deal. Vulcan shares were little changed, while Florida Rock shares jumped 42 percent.

Britain's Shire PLC said it will buy U.S. partner New River Pharmaceuticals (up $4.84 to $63.19, Charts) for $2.6 billion. New River shares gained 8.3 percent.

Apple (up $1.07 to $85.90, Charts), Amazon.com (up $1.15 to $41.51, Charts), Oracle (up $0.28 to $16.98, Charts) and Sun Microsystems (up $0.09 to $6.38, Charts) were among the heavily-traded technology stocks boosting the Nasdaq.

JetBlue (down $0.66 to $12.90, Charts) shares slumped almost 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 millions of dollars. The CEO also said he won't be stepping down.

Additionally, Morgan Stanley downgraded the stock.

Market breadth was positive. On the New York Stock Exchange, losers beat winners by five to three on volume of 1.33 billion shares. On the Nasdaq, advancers topped decliners by nearly two to one on volume of 2.26 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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