Stocks Close Higher On Economic News and Gains by Blue Chips

Stocks closed higher following mostly positive news about the U.S. economy and gains from several major blue-chip companies.

The Dow Jones Industrial Average ended up strongly, while the Nasdaq and the S&P 500 also rose.

Economic data ruled Tuesday's session as the markets reacted positively to a favorable inflation sign and unexpected strength in the services sector.

More economic reports are due to be released Wednesday, including the weekly oil and gasoline inventories. Traders are expecting a rise in crude oil and gasoline stocks and a draw down in distillates.

The Dow was lifted by gains in shares of Coca Cola after Merrill Lynch raised its price target on the beverage giant.

Disney, another Dow component, hit a 52-week high after its chief financial officer forecast improved margins at the company's theme parks and better profitability from its film division in fiscal 2007.

General Motors also rose after competitor Ford announced plans to take on another $3 billion in debt.

Dow component Boeing also helped the blue chips. Longtime Airbus customer, Deutsche Lufthansa, could announce as soon as tomorrow that it will be the first to order the passenger version of Boeing's updated 747 jumbo jet, according to the Wall Street Journal.

Shares of Sanofi-Aventis traded higher on positive news about its obesity drug. CNBC's Mike Huckman reported that analysts believe Acomplia could be the next multi-billion dollar weight-loss drug.

The French drugmaker said a study showed Acomplia also significantly improved blood sugar control, as well as weight in patients with type-2 diabetes. Acomplia is already approved in more than half a dozen countries and could get U.S. Food and Drug Administration approval in the first half of 2007.

Home builder Toll Brothers reported a profit of $1.07 per share for its fiscal fourth quarter, which ended in October. The profit was down from earnings of $1.84 per share in the year-ago period, but a penny above analysts' expectations. The luxury home builder says profits could drop up to 62% next year.

But after 15 months of a housing slowdown, the company said it may be seeing "a floor" in some markets.

Shares of Sirius Satellite Radio fell after the company cut its year-end 2006 subscriber forecast, blaming the decline on fewer-than-expected retail sales in advance of the holidays.

Oil prices, which seesawed back and forth, ended flat Tuesday, trading under $63 a barrel.

U.S. Gains Push Euro Stock Higher

Europe closed higher, helped by the positive economic data in the U.S. and strength in mining and energy stocks.

London's FTSE-100 closed higher, helped by an upgrade of Vodafone. Germany's DAX and the CAC-40 in France were also up.

Goldman Sachs boosted its rating on Vodafone to "buy" from "neutral," saying that the shares are not outperforming the sector and that growth in emerging markets makes the stock attractive.

In the banking sector, HSBC, the biggest European bank based on market capitalization, said its financial performance for the third quarter is ahead of its year-ago performance, but added revenue growth slowed from the first half of the year.

Japan Slides on Oil Price Drift

Asian markets put on a mixed performance. The Nikkei 225 ended the day lower as gains in technology stocks were not able to offset losses in energy shares after oil prices fell below $63 a barrel on Monday. South Korea's Kospi Index also finished down as fears of the strengthening won pulled down the market.

Australian shares closed marginally higher. John Fairfax, which is seen as a takeover target when Australia's new media ownership laws take effect next year, rose after Seven Network confirmed it bought a stake without giving further details.

Hong Kong's Hang Seng Index closed higher tracking gains in the U.S. with blue chips boosting the market. Singapore's Straits Times Index hit a new record high with investors rallying on positive local news.