Dow rises again

NEW YORK (CNNMoney.com) -- Blue chips surged late Tuesday afternoon, boosting the Dow industrials and helping the broader market cut losses as investors weighed lower oil prices, mixed economic and company news and weak April auto sales.

The Dow Jones industrial average (up 57.87 to 13,120.78, Charts) added 0.4 percent with around 30 minutes left in the session, after having hit an all-time intraday high in the previous session. The tech-heavy Nasdaq composite (up 3.14 to 2,528.23, Charts) added a few points and the broader S&P 500 (up 2.78 to 1,485.15, Charts) index was modestly higher.

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Stocks slumped Monday, led by the Nasdaq, as investors stepped back at the end of a strong April, boosted by upbeat first-quarter earnings.

That weakness kept markets choppy most of Tuesday, as investors eyed a strong read on manufacturing, further signs of weakness in the housing market, and a number of earnings warnings and other company news.

But by the early afternoon, stocks were back in positive territory, with blue-chip gains leading the advance, as 26 out of 30 Dow components rose.

Among stock movers, Dow Jones (up $21.37 to $57.70, Charts) surged 50 percent after it received an unsolicited $5 billion takeover bid from News Corp. (down $0.78 to $23.22, Charts, Fortune 500) News Corp shares slumped 4 percent.

Automakers were reporting April sales throughout the session. General Motors (up $0.20 to $31.43, Charts, Fortune 500) said U.S. sales fell 2.2 percent in the month, due to the impact of a weak housing market and high gas prices. Shares inched higher.

Ford Motor (down $0.03 to $8.01, Charts, Fortune 500) said shares fell 12.9 percent from a year ago. Shares were little changed.

Circuit City (down $1.06 to $16.39, Charts, Fortune 500) slipped 6 percent in active New York Stock Exchange trading after saying late Monday that it expects to report a first-quarter loss. The electronics retailer also withdrew its previously issued first-half outlook, blaming weaker April sales.

On Tuesday morning, Dow component Procter & Gamble (down $1.46 to $62.94, Charts, Fortune 500) reported fiscal third-quarter earnings that rose from a year earlier and met analysts' forecasts on higher sales that beat forecasts. The consumer products company also said it expects fiscal fourth-quarter and full year earnings to hit the top end of its previous range, in line with forecasts.

However, shares fell 2 percent as investors took a 'sell the news' approach.

Archer Daniels Midland (down $2.32 to $36.38, Charts, Fortune 500) reported higher quarterly earnings that missed estimates on higher revenue that topped estimates. Shares of the U.S. food processor and ethanol maker slumped 6 percent in unusually active New York Stock Exchange trade.

BEA Systems (down $0.43 to $11.36, Charts) lost 5 percent in active Nasdaq trade after the business software maker warned that first-quarter revenue won't meet forecasts, due to a tough selling environment.

Liz Claiborne (down $8.22 to $36.50, Charts, Fortune 500) slumped 18 percent after the women's clothing retailer reported sharply lower quarterly profit that missed expectations and warned that 2007 earnings would miss estimates.

BP (up $0.11 to $67.43, Charts) said its CEO was stepping down after UK courts removed a legal injunction that stopped a newspaper group from printing details of his private life. Shares gained modestly.

Market breadth was mixed. On the New York Stock Exchange, winners narrowly edged losers on volume of 1.51 billion shares. On the Nasdaq, decliners topped advancers by a narrow margin on volume of 2.1 billion shares.

With 68 percent of the S&P 500 having reported results, earnings are currently on track to have risen 6.8 percent from a year earlier, more than double what analysts were forecasting April 1, according to the latest Thomson Financial estimates.

While the results have been better than what was expected, the first quarter does represent the slowest earnings growth in 3-1/2 years, with the S&P 500 breaking a streak of 14 quarters of double-digit percentage growth.

The earnings helped lift stocks in April, a traditionally strong month on Wall Street.

The Dow rose about 5.7 percent in the month, its best percentage gain in a month since October 2003. The Nasdaq composite rose 4.3 percent, its best monthly gain since October 2004. The S&P 500 index rose 4.3 percent in April, its best one-month gain since November 2004.

After the strong April, the major gauges were probably vulnerable to a pullback early May, particularly as they hit up against what analysts refer to as resistance levels, said Todd Salamone, director of trading at Schaeffer's Investment Research.

"Overall, we're bullish, but we would expect some consolidation-type behavior in the short term, followed by a general upward move later in the month," Salamone said.

He said that such a move was typical after a period of strength.

The morning brought a number of economic reports. The ISM index, a key reading on manufacturing, rose to 54.7 in April from 50.9 in the previous month. Economists thought it would rise to 51.0.

Pending home sales fell 4.9 percent in the month, showing a large drop among sellers finding buyers for their homes.

U.S. light crude oil for June delivery fell $1.27 to settle at $64.44 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $6.20 to $677.30 an ounce.

Treasury prices slipped, raising the yield on the 10-year note to 4.64 percent from 4.62 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained against the euro, after hitting an all-time low versus the European currency last week. The dollar also rose versus the yen.