Dow jumps back near record high

NEW YORK (CNNMoney.com) -- The Dow climbed Tuesday afternoon, thanks to upbeat earnings from components Coca-Cola and Johnson & Johnson, but the Nasdaq composite struggled for direction.

The Dow Jones industrial average (up 45.42 to 12,765.88, Charts) gained about 0.5 percent with around 90 minutes left in the session. Earlier, the index had briefly topped its record closing high of 12,786.64 hit last February, before scaling back. The Dow has not topped its all-time trading high.

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The broader S&P 500 (up 2.64 to 1,471.11, Charts) index added 0.2 percent. The Nasdaq (Charts) composite was little changed.

Stocks surged Monday as investors eyed merger news and a rash of earnings from Dow component Citigroup (down $0.30 to $52.63, Charts) and others. Blue chips extended the gains Tuesday even while the tech-driven Nasdaq struggled.

Upbeat earnings reports from Coca-Cola and Johnson & Johnson boosted the Dow. But the Nasdaq dipped as investors eyed a mixed batch of earnings for the tech-fueled index - and the morning's economic news.

"The earnings news is helping and some of the economic news has been strong," said Harry Clark, CEO at Clark Capital Management.

Although the first wave of earnings have strong, Clark said, the overall earnings reporting period is going to be weak. Yet, that slowdown has been so widely anticipated that investors are already starting to look beyond it, he said.

Nearly a fifth of the S&P 500 reports results this week, including 12 Dow components.

S&P 500 earnings are currently on track to rise 3.4 percent from a year earlier, according to the latest Thomson Financial figures. That rate of earnings growth will be the slowest in more than 3-1/2 years, slipping below 10 percent on a year-over-year basis after 14 quarters of double-digit growth.

Marquee tech companies IBM (up $0.85 to $97.03, Charts), Intel (up $0.25 to $20.94, Charts) and Yahoo! (up $0.38 to $31.99, Charts) are all due to report results after the close Tuesday.

The morning brought a number of economic reports.

Rising gasoline costs drove consumer prices up 0.6 percent in March, the sharpest rise in nearly a year, the government reported. But so-called core prices, which strip out volatile food and gas costs, rose a smaller-than-expected 0.1 percent in the month. (Full story).

The battered housing sector got some encouraging news. Both housing starts and building permits rose more than expected in March but results were affected by severe weather in the Midwest and were weaker versus prior-year levels. (Full story).

Yet a third report was less upbeat, showing a surprise drop in industrial production in March, missing forecasts for a flat reading. Capacity use dropped more than expected. (Full story).

U.S. light crude oil for May delivery fell 26 cents to $63.35 a barrel on the New York Mercantile Exchange, retreating after an early advance.

A number of companies reported earnings, including Dow components Coca-Cola and Johnson & Johnson.

Coke (up $1.28 to $51.55, Charts) reported first-quarter earnings and sales that rose from a year ago and topped estimates, sending shares up about 2.5 percent. However, the beverage company's CEO warned of weak U.S. soda sales in 2007. (Full story).

Johnson & Johnson (up $1.87 to $64.89, Charts) reported higher quarterly earnings and sales that topped estimates, and also boosted its 2007 earnings outlook. The stock climbed 3 percent. (Full story)

EMC (up $0.43 to $15.19, Charts) reported higher quarterly earnings and revenue that topped forecasts. Shares of the maker of computer data storage gear gained 3 percent in active New York Stock Exchange trading.

On the downside, TD Ameritrade (down $1.41 to $15.46, Charts) reported weaker quarterly earnings that were short of forecasts. Its stock tumbled about 8 percent in active Nasdaq trading and dragged on the Amex Securities Broker/Dealer (Charts) Index.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.01 billion shares. On the Nasdaq, decliners topped advancers four to three on volume of 1.31 billion shares.

Treasury prices climbed, lowering the yield on the benchmark 10-year note to 4.68 percent from 4.73 percent Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell to a two-year low versus the euro and fell versus the yen after the morning economic news. Meanwhile, the British pound surged to a 14-year high versus the dollar.