Dow boosted by Coke, J&J

NEW YORK (CNNMoney.com) -- The Dow jumped Tuesday afternoon, boosted by strong earnings from components Coca Cola and Johnson & Johnson, but the broader market struggled amid mixed economic news and higher oil prices.

The Dow Jones industrial average (up 58.26 to 12,778.72, Charts) added 0.5 percent over 3 hours into the session.

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The broader S&P 500 (up 4.62 to 1,473.09, Charts) index added 0.3 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 $0.10 to $52.83, Charts) and others. After struggling at the open Tuesday, stocks resumed the upward trend, with blue chips leading the way.

Upbeat earnings reports from Coca-Cola and Johnson & Johnson boosted the Dow. However, the Nasdaq composite struggled as investors eyed the morning's economic news and a spike in oil prices.

"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 reports has been strong, Clark said that the overall earnings reporting period is going to be very weak. Yet, that slowdown has been so widely anticipated that investors are in the process of looking beyond it, he said.

Nearly one-fifth of the S&P 500 is reporting results this week, including 12 Dow components. S&P 500 earnings are currently on track to have risen 3.4 percent from a year earlier, according to the latest Thomson Financial figures. That means the 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 $0.41 to $96.59, Charts), Intel (up $0.21 to $20.90, Charts) and Yahoo! (up $0.39 to $32.00, Charts) are all due to report results after the close Tuesday.

The morning brought a number of economic reports.

Rising gasoline costs drove up overall consumer prices 0.6 percent in March, the sharpest run up 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, improving from February levels. However, results 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 rose 64 cents to $64.25 a barrel on the New York Mercantile Exchange.

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

Coke (up $1.70 to $51.97, Charts) reported first-quarter earnings and sales that rose from a year ago and topped estimates, sending shares 3.5 percent higher. However, the beverage company's CEO warned of weak U.S. soda sales in 2007. (Full story).

Johnson & Johnson (up $1.98 to $65.00, Charts) reported higher quarterly earnings and sales that topped estimates, and also boosted its 2007 earnings outlook. Shares gained 3.2 percent in the morning. (Full story)

EMC (up $0.33 to $15.09, 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.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 760 million shares. On the Nasdaq, decliners topped advancers by a slim margin on volume of 970 million shares.

Treasury prices climbed, lowering the yield on the benchmark 10-year note to 4.69 percent from 4.73 percent Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell to a two-year low versus the euro and also declined versus the yen, in response to the morning economic news. In other currency news, sterling surged, pushing the pound to a more than 14-year high versus the dollar.