Companies' solid earnings reports and upbeat outlooks are sending stocks mostly higher.
Caterpillar Inc. joined other companies Tuesday in issuing an improved 2009 profit forecast, even as it said its second-quarter profit fell 66 percent on weaker sales. The heavy equipment maker is considered a bellwether of the global economy so its guidance was particularly encouraging to investors. Its shares soared more than 12 percent.
Meanwhile, chemical maker DuPont Co. and drug company Merck & Co. reported drops in their quarterly profit, but results still came in ahead of Wall Street's forecasts.
Companies' reports have largely exceeded expectations so far this earnings season, fostering a renewed sense of optimism in the market and helping to drive the Dow Jones industrials back into the black for the year.
"This is the most solid evidence that we've seen that conditions are improving," said Jack Ablin, chief investment officer at Harris Private Bank, of the earnings reports.
Other companies expected to report Tuesday include tech giants Yahoo Inc. and Apple Inc., as well as Starbucks Corp.
Investors will also be listening intently to testimony from Federal Reserve Chairman Ben Bernanke, who will give his semiannual report to Congress on Tuesday and Wednesday. The market is anxious for his take on the economy, and are hungry for any clues on how the central bank plans to exit the numerous emergency support programs put in place last fall at the height of the financial crisis.
In morning trading, the Dow rose 44.90, or 0.5 percent, to 8,893.05. The Standard & Poor's 500 index gained 0.67, or 0.1 percent, to 951.80, while the Nasdaq composite index slipped 7.13, or 0.4 percent, to 1,902.16.
About three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 151.3 million shares.
In other earnings news, UnitedHealth Group Inc. also boosted its full-year earnings outlook, as it reported a second-quarter profit that was more than double what it earned in the year-ago period. And Coca-Cola Co., the world's largest beverage maker, said its earnings jumped 43 percent even as sales fell, beating analysts' estimates.
