US stocks jump after strong corporate earnings

DANIEL WAGNER AP Business Writer Published:

Stocks soared Tuesday after big U.S. companies posted strong quarterly profits and the Spanish government reassured investors with a successful debt auction. The Dow Jones industrial average jumped 170 points in late morning trading.

Coca-Cola leapt 2.8 percent after the company said its profit rose 8 percent in the first three months of the year, topping the forecasts of Wall Street analysts. Revenue rose six percent.

U.S. stock indexes followed European markets higher after the Spanish government sold more than €3.2 billion ($4.2 billion) in short-term debt, more than had been expected. Investors demanded high interest rates, reflecting continued uncertainty about Spain's finances.

Still, the mood in Europe is improving. The yield on Spain's 10-year government bond fell to 5.86 percent from 6.10 percent early Monday, a sign of improving confidence in the country's finances. Italy's borrowing costs also fell.

A strong reading on investor sentiment in Germany helped propel benchmark stock indexes in France and Germany 2.5 percent higher. Italy's stock index surged 3.6 percent.

Major U.S. indexes gained 1.3 percent or more. The Dow rose to 13,091 as of 11:11 a.m. The Standard & Poor's 500 index rose 18 to 1,387. The Nasdaq composite index leapt 47 to 3,035.

It was the best day for the Nasdaq in more than three weeks, a day after the falling price of Apple stock pulled the tech-heavy index to a steep loss. Apple rose 3 percent after five straight days of losses.

The rally was broad. All 10 industry groups in the S&P 500 rose, as did 18 of the 20 stocks in the Dow.

Some traders appeared confident that the current batch of earnings will continue to bring good news. Several companies that will report later Tuesday, including IBM and Yahoo, rose more than the broader market.

The rally followed a batch of mixed economic news. The number of permits requested by homebuilders for future projects reached a 3½-year high, an indication that the housing market might stop weighing down the economy. But builders broke ground on new homes at a slower pace in March.

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Daniel Wagner can be followed at www.twitter.com/wagnerreports .

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