Stocks recharge, led by Nasdaq
Major gauges recover from morning retreat as investors scoop up select technology shares, welcome merger in satellite radio industry, Wal-Mart earnings.
NEW YORK (CNNMoney.com) -- Stocks bounced back Tuesday afternoon, recovering from earlier declines as investors scooped up select tech shares and eyed lower oil prices, a merger in the satellite radio industry and earnings from a pair of Dow retailers.
The tech-fueled Nasdaq (up 13.05 to 2,509.36, Charts) composite led the way with a 0.5 percent gain.The Dow Jones industrial average (up 14.98 to 12,782.55, Charts) was 0.1 percent higher around three hours into the session after ending last week at a record high.
The broader S&P 500 (up 3.10 to 1,458.64, Charts) index rallied 0.2 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.
"It seemed like we were set up for a bit of a down day, but it's been coming back now," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
"Retailers have been strong all morning, with Wal-Mart the standout," he added.
Wal-Mart Stores (up $1.50 to $49.98, 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 $0.08 to $41.36, Charts) turned positive, recovering 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 $0.26 to $3.96, Charts) and XM Satellite Radio (up $1.55 to $15.53, Charts) announced a merger of equals Monday that would value the combined company at roughly $13 billion. (Full story).
Sirius shares jumped 7 percent and XM Satellite shares gained 14 percent in very active Nasdaq trade, although there was some doubt about whether regulators would approve the deal. (Full story).
On the move
The satellite radio industry was not the only one to see consolidation Tuesday.
Additionally, Vulcan Materials (down $1.01 to $110.80, Charts), which makes highway construction products, said Tuesday it would buy Florida Rock Industries (up $19.54 to $66.50, Charts) in a $4.6 billion cash and stock deal.
Vulcan shares were little changed, while Florida Rock shares jumped 42 percent.
JetBlue (down $0.62 to $12.94, Charts) shares slumped 6 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 turned positive. On the New York Stock Exchange, losers beat winners by three to two on volume of 650 million shares. On the Nasdaq, advancers topped decliners three to two on volume of 1.27 billion shares.
U.S. light crude oil for March delivery tumbled $1.63 to $57.76 a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell $11.60 to $661.20 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 lower, raising the yield on the benchmark 10-year note to 4.69 percent from 4.68 percent late Friday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar gained versus the euro and the yen.