NEW YORK (CNNMoney.com) -- A surge in energy prices and better-than-expected profit reports from Goldman Sachs and others helped stocks Tuesday.
After the close, Apple (AAPL, Fortune 500) reported quarterly sales and earnings that easily trounced expectations, thanks to strong sales of its iPods and iPhones. The company also issued a current-quarter profit forecast that surpasses analysts' estimates. Shares gained nearly 6% in extended-hours trading.
Also after the close, Yahoo (YHOO, Fortune 500) reported higher quarterly earnings that topped estimates and higher quarterly sales that missed estimates. Shares fell nearly 4% in extended-hours trading.
Stocks seesawed Tuesday morning as investors mulled Goldman Sachs (GS, Fortune 500)' improved earnings and analysts grilled the firm over SEC charges that it defrauded investors in a deal involving the marketing of subprime mortgages.
But stocks turned higher as investors focused on better-than-expected reports from Coca-Cola, Johnson & Johnson and others, as well as a rally in energy, mining and metal prices and stocks.
Investors took a "sell the news" approach to IBM's improved results released late Monday, with weakness in that stock limiting the Dow's gains. IBM is the Dow's most heavily weighted component.
Stocks ended mostly higher Monday as worries about Goldman Sachs eased and Citigroup's strong earnings soothed investors. Concerns about the potential fallout from Goldman Sachs dragged on stocks at the end of last week. But investors took comfort Monday from reports that said that regulators decided to pursue charges against the firm by just a narrow majority.
"The Goldman risk has been built into the market, along with some of the fear about financial reform regulation," said David Chalupnik, head of equities at First American Funds. "Now earnings are back in the driver's seat."
Goldman: The company reported a better-than-expected first-quarter profit of $3.5 billion on strength in its investment banking business and improved trading volume.
Quarterly results: IBM (IBM, Fortune 500) posted higher quarterly sales and earnings that topped estimates late Monday. The company also boosted its full-year 2010 earnings forecast. But shares fell nearly 2% Tuesday as investors worried about a surprise decline in the backlog, Chalupnik said.
Johnson & Johnson (JNJ, Fortune 500) reported higher quarterly earnings that beat estimates on higher revenue that met estimates as strong sales of medical devices overshadowed weaker sales of prescription drugs and consumer products.
The Dow component also trimmed its full-year 2010 earnings forecast due to currency rate fluctuations and the impact of the U.S. health care bill. Shares were little changed.
S&P 500 earnings are currently on track to have risen 45% versus a year ago, according to the latest from Thomson Reuters. Revenues are on track to have risen 11%.
World markets: In overseas trading, European markets rose, with London's FTSE gained 1%, France's CAC 40 gained 1.3% and Germany's DAX gained 1.5%. Asian markets were mixed, with Hong Kong's Hang Seng index up 1% and Japan's Nikkei down 0.1%.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.80% from 3.81% late Monday. Treasury prices and yields move in opposite directions.
The dollar and commodities: The dollar fell versus the euro and gained against the yen.
COMEX gold for June delivery rose $3.40 to settle at $1,139.20 per ounce.
U.S. light crude oil for May delivery rose $2 to settle at $83.45 a barrel on the New York Mercantile Exchange, the last day of the May contract. The June contract settled at $83.85 a barrel, up 72 cents from Monday's closing price.
Market breadth was positive. On the New York Stock Exchange, winners beat losers four to one on volume of 1.14 billion shares. On the Nasdaq, advancers topped decliners three to one on volume of 2.11 billion shares.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.36%||4.24%|
|15 yr fixed||3.39%||3.26%|
|30 yr refi||4.34%||4.22%|
|15 yr refi||3.38%||3.24%|
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