Jan. 22, 2013 at 4:08 PM ET
Bank and commodity shares led the Standard & Poor's 500 to a fresh five-year closing high on Tuesday on hopes that the global economy continues to mend.
The Dow Jones industrial average rose 62.43 points or 0.46 percent, to end unofficially at 13,712.13. The S&P 500 gained 6.52 points or 0.44 percent to finish unofficially at 1,492.50. The Nasdaq Composite added 8.47 points or 0.27 percent to close unofficially at 3,143.18.
The market also gained on signals that Republican leaders in the U.S. House of Representatives aim on Wednesday to pass a nearly four-month extension of the U.S. debt limit. The White House welcomed the move on Tuesday, saying it defuses fears of a U.S. default on its debt.
Adding to the upbeat sentiment, Portuguese 10-year debt yields fell below 6 percent for the first time since late 2010 on news that the country was set to tap the bond market this week for the first time since it was bailed out in 2011.
"Cyclicals underperformed late last year because of the fear of the fiscal cliff and the debt ceiling," said Jack de Gan, chief investment officer at Harbor Advisory Corp, in Portsmouth, New Hampshire.
He said overall better economic numbers in the United States and China, as well as more stabilization in Europe, were driving buyers into sectors associated with economic growth.
"Not very often do you go very far beyond that in the short term," De Gan said, "so any (bearish) news could turn us down for a day or so."
Technology shares underperformed as concerns about Apple's ability to continue to grow at hyper speed and a weak outlook from Intel Corp have diminished optimism about the sector's prospects. The S&P technology index was off 0.2 percent.
"Any one of those, if there is a big surprise up or down, could shift the balance in the markets. So investors are being far more cautious than normal, especially with the market averages having broken out to five-year highs," said Fred Dickson, chief market strategist at D.A. Davidson & Co, in Lake Oswego, Oregon.
Blue chips DuPont , the largest U.S. chemical company by market capitalization, and Verizon Communications also posted revenue that beat forecasts.
DuPont's shares gained 1.6 percent to $47.74 while Verizon's rose 0.4 percent to $42.73.
On the downside, shares of Johnson & Johnson , the diversified health company, slipped 0.8 percent to $72.66 after it forecast 2013 earnings below expectations.
Thomson Reuters data through Tuesday morning showed that of the 74 companies in the S&P 500 that have reported earnings so far, 62.2 percent have topped expectations, roughly even with the 62 percent average since 1994, but below the 65 percent average over the past four quarters.
Overall, S&P 500 fourth-quarter earnings are forecast to have risen 2.6 percent. That estimate is above the 1.9 percent forecast from the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast from October 1, the data showed.
U.S.-listed shares of Research in Motion jumped 11.3 percent to $17.63 a day after its chief executive said the Canadian company may consider strategic alliances with other companies after the launch of devices powered by RIM's new BlackBerry 10 operating system.
Copyright 2013 Thomson Reuters.