Stocks manage gains
Wall Street struggles higher as some upbeat earnings and a strong N.Y. manufacturing report vie with record oil and gas prices.
NEW YORK (CNNMoney.com) -- Stocks rose Tuesday, in a choppy session, in which investors looked to the day's upbeat earnings announcements and a strong regional manufacturing report, and shrugged off record oil and gas prices and other signs of inflation.
The Dow Jones industrial average (INDU), the broader Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all added around 0.5%.
Stocks declined Monday as Wachovia's weak quarterly report overshadowed any relief over a better-than-expected March retail sales report. Stocks swayed on both sides of unchanged Tuesday morning, before inching higher in the afternoon.
However, any gains were limited, as investors mulled the economic news, the run up in commodity prices and the earnings reports.
"Investors are trying to gauge how the earnings season is going to go," said John Forelli, portfolio manager at Independence Investments.
"Today is the first day in the reporting period that we didn't see any big bombs like GE last week and we also saw some better earnings," he said. "But it's still very early in the period and stocks are probably going to be stuck in a trading range for a while longer."
Alcoa (AA, Fortune 500), General Electric (GE, Fortune 500) and Wachovia (WB, Fortune 500) are among the big companies that have reported weaker-than-expected quarterly results so far in the start of what is expected to be a pretty abysmal reporting period.
First-quarter earnings are currently on track to have fallen about 14.4% from a year ago, according to the latest Thomson Financial figures. That 14.4% number mostly consists of expected earnings, with only 8% of the S&P 500 having reported results so far.
After the close, Intel (INTC, Fortune 500) reported lower first-quarter earnings that met estimates on higher sales that topped estimates. The chipmaker also forecast second-quarter revenue in a range that could beat analysts' current forecasts. Shares jumped after the close. (Full story).
Also after the close, Washington Mutual (WM, Fortune 500) reported a quarterly loss of $1.40 per share, versus forecasts for a loss of $1.05 per share. The mortgage lender, which warned last week that it would post a bigger loss, also said that it has concluded its plans to raise $7 billion in capital from outside sources. Shares were little changed after the close. (Full story)
Airline merger. Delta Air Lines (DAL, Fortune 500) announced a long-expected deal to buy Northwest Airlines (NWA, Fortune 500) for about $3.1 billion in a move that will create the world's largest airline. Delta shares fell 9% and Northwest shares fell 4% as investors mulled the legal and regulatory hurdles the companies will have to jump. Shares of other airlines also trended lower amid questions about how the merger might lead to a broader consolidation in the industry.
Earnings. Johnson & Johnson (JNJ, Fortune 500), the maker of drugs and healthcare products, reported higher quarterly sales and earnings that topped estimates. Shares of the Dow component declined modestly.
US Bancorp (USB, Fortune 500) reported weaker earnings and higher sales, all of which topped forecasts. The bank attributed its soft results to the mortgage market fallout, but said its credit problems are manageable. Shares gained modestly.
State Street (STT, Fortune 500) reported higher quarterly sales and earnings that topped estimates, with the financial services firm seeing growth across almost all of its businesses. However, investors sold the stock after management said the company posted billions in losses on two portfolios, related to the credit crisis. Shares fell almost 10%.
Fellow financial services firm Northern Trust (NRTS) reported higher quarterly earnings that topped estimates, sending shares 4.7% higher.
On the downside, Crocs (CROX) plunged 43.2% and was the Nasdaq's third most-actively traded issue after the shoe retailer warned late Monday that first-quarter earnings won't meet forecasts.
Also dragging on the Nasdaq was Affymetrix (AFFX), a genetic analysis gear maker, after it said that first-quarter revenue won't meet forecasts due to customers cutting back on research and development. Shares lost 33%.
Regional manufacturing rebounds. The NY Empire State index, a reading of manufacturing in the New York region, rose to 0.6 in April, versus forecasts for a reading of -17. The index came in at -22.2 in the previous month. Any reading that is positive suggests growth, while a negative reading suggests a slowdown in the sector.
While the report was a positive, first and second quarter economic growth is expected to be anemic at best, with the Federal Reserve and the majority of economists saying the nation is at risk of falling into a recession, if it isn't in one already.
Inflation on the rise. The Producer Price index (PPI), a measure of inflation at the wholesale level, jumped 1.1% last month, topping forecasts for a rise of 0.6%. PPI rose 0.3% in the previous month. The so-called "core" PPI, which excludes volatile food and energy prices, rose 0.2%, in line with estimates. Core PPI rose 0.5% last month.
Housing bust continues. Foreclosure filings jumped 57% in March versus a year earlier, according to an industry study from RealtyTrac. The March figure was also up 5% from the previous month.
McCain outlines economic plan. Presumptive Republican nominee John McCain unveiled an agenda Tuesday that includes temporarily suspending the gas tax, changing tax policy and freezing discretionary spending. (Full story)
Commodity prices. U.S. light crude oil for May delivery rose $2.03 to settle at a record $113.79 a barrel on the New York Mercantile Exchange after hitting a record $113.99 in electronic trading.
The national average price for a gallon of regular unleaded gas hit an all-time record of $3.386, AAA reported.
COMEX gold for June delivery rose $3.30 to settle at $932 an ounce.
Other markets. The dollar fell versus the euro and gained against the yen.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.60% from 3.51% late Monday. Bond prices and yields move in opposite directions. 
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