NEW YORK - US stocks climbed on Tuesday after several banks, including Bank of America Corp., posted higher fourth-quarter profits, while a stabilisation in oil prices eased worries about steep energy costs.
Oil prices erased earlier gains, with US February crude futures settling unchanged at US$48.38 a barrel -- reversing an initial climb to US$49.50 as a bitter cold front swept across the US Northeast.
Among a slew of companies reporting earnings was Bank of America, the No. 3 US bank, which closed up nearly 2 per cent, or 84 cents to US$45.73 after it reported a 41 per cent rise in fourth-quarter profit.
After the closing bell, International Business Machines Corp. posted a quarterly net profit that beat Wall Street's recently raised target as solid year-end product sales were buoyed by a weaker US dollar.
Shares of Big Blue rose 60 cents, or 0.6 per cent, to US$95.50 in post close trading on the Inet electronic exchange. IBM closed up 80 cents at US$94.90 during the regular session.
The Dow Jones industrial average finished up 70.79 points, or 0.67 per cent, at 10,628.79. The Standard & Poor's 500 Index rose 11.46 points, or 0.97 per cent, to 1,195.98. The Nasdaq Composite Index was up 18.13 points, or 0.87 per cent, at 2,106.04.
The Dow, S&P and Nasdaq closed at their highest levels in about two weeks.
"Across the board, you're seeing some money coming into the market," said Michael Murphy, managing director at Wachovia Securities. "There weren't a lot of people around in the early part of the year and now people are coming back in, they're looking around. Earnings numbers are coming in pretty positive and people are putting some money to work."
Short covering and programme buying were a factor buoying stocks Tuesday, said Andre J. Bakhos, president of Princeton Financial Group.
Short-covering is the buying back of a share which was previously sold to close out a short position. Short-sellers borrow shares, then sell them, waiting for the stock to fall so they can buy the shares at the lower price, return them to the lender and pocket the difference. Programme buying is the automated buying of blocks of shares according to predetermined parameters, such as price and time of day.
The gains also reflected "the expectation that earnings may not be as sour as people have been speculating," Bakhos said.
Among other banks reporting earnings, Wells Fargo & Co., US Bancorp and National City Corp. all gained after posting increased profits. Wells Fargo rose 1.3 per cent, or 77 cents to US$61.46, US Bancorp gained 2.8 per cent, or 84 cents to US$31.03, and National City gained 3.3 per cent, or US$1.15 to US$36.37.
But Dow component 3M Co., the maker of Scotch tape and Post-It notes, fell 2.3 per cent, or US$1.95 to US$81.02 after the performance of its display and graphics unit was weaker than some analysts expected.
In other news, shares in May Department Stores Co. shot higher as the resignation of its chief executive prompted analyst upgrades -- and some bid speculation -- on hopes of a turnaround for the company. The stock rose 16 per cent, or US$4.37 to US$32.21.
Krispy Kreme Doughnuts Inc. shares climbed 10 per cent, or 89 cents to US$9.61. The doughnut chain, which is facing a federal accounting probe, replaced its CEO, Scott Livengood.
Electronic Arts Inc. shares climbed 2 per cent, or 97 cents to US$60.81, after the video game publisher announced a 15-year licensing deal with sports broadcaster ESPN Monday.
Oil companies were given a boost by Morgan Stanley raising its fourth quarter estimates for integrated oils -- ones which explore, drill and refine -- citing stronger-than-expected oil and gas prices. It named ConocoPhillips, Marathon Oil Corp., and Exxon Mobil Corp. as its favorite integrated oil stocks. Conoco rose 1.2 per cent, or US$1.10 to US$90.12, Marathon edged up 46 cents, or 1.2 per cent, to US$38.76 and Exxon nudged up 43 cents to US$51.50.
In economic news, net inflows of capital into US assets surged to an unexpectedly high US$81 billion in November, according to a Treasury Department report on Tuesday. That gave a small boost to the dollar which was up against the yen and the euro -- generally a positive for equities as it helps investment in US assets.
However, activity at New York state factories fell in early January, although manufacturing conditions remain favorable, a survey by the Federal Reserve Bank of New York said.
- REUTERS
<EM>US stocks:</EM> Markets climb as banks rise, oil stabilises
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