Energy Stocks Lead Dow Higher

U.S. stocks advanced Tuesday, led by energy as supply disruptions boosted oil prices.

The Dow Jones Industrial Average jumped more than 100 points in the first minutes of trading, but later settled in around 80 points higher.

Blue-chip oil giants Exxon Mobil and Chevron led the advance on the Dow, as oil prices jumped nearly three dollars to $98.32 a barrel.

Hewlett-Packard , which reports earnings after the closing bell, rounded out the Dow's top three. Analysts expect earnings of 81 cents a share.

The Dow also received a boost from new component Bank of America , which, along with Chevron, was officially added to the blue-chip average today. Altria and Honeywell were dropped.

Momentum had started to build before the opening bell following better-than-expected earnings from Wal-Mart . The world's largest retailer reported its net income rose 4 percent to $4.1 billion, or $1.02 a share, in the fiscal fourth quarter ended Jan. 31. Excluding charges for dropped real-estate projects and restructuring, the world's largest retailer earned $1.04 a share, beating analysts' expectations by two cents a share. Revenue increased 8.3 percent to $106.27 billion.

"The death of the consumer has been greatly exaggerated," Jack Bouroudjian, a principal at Brewer Investment Group, told "Squawk Box" after Wal-Mart's report. "The reality is the numbers don't lie for these companies. Earnings are still strong, that's why this stock market will continue to go higher."

Still, Wal-Mart warned that consumers are becoming more cautious and said its earnings in the current quarter would fall short of estimates. The uptick following the earnings report likely indicates that the market is "pleased that we dodged the consumer-spending bullet, rather than -- to mix metaphors -- the fact that Wal-Mart hit it out of the park," Scott Nations, president of Fortress Trading, told CNBC.

Elsewhere in retail, Best Buy slipped after Jefferies, which has a "hold" rating on the electronics retailer's stock, cut its price target to $42 from $46.

Bed, Bath & Beyond fell after Morgan Keegan cut its rating on the home-furnishings retailer's stock to "underperform" from "market perform."

In Cuba, Castro stepped down as president at the age of 81 after years of failing health. He walks away from the dual roles of president and commander-in-chief after leading the communist state for 49 years.

Fed speak got off to an early start, with Minneapolis Fed President Gary Stern saying that the central bank's interest-rate cuts are appropriate to restore stability to the financial markets and prevent further damage to the economy.

"Against the backdrop of the financial shocks that have beset the economy and their implications for the outlook, the reduction in the funds rate target appears wholly appropriate," he said in prepared remarks before the Financial Planning Association of Minnesota.

Offering some hope for battered financials, MBIA announced that former CEO Joseph "Jay" Brown is returning to the company's helm. Brown said he is optimistic that a deal involving New York state insurance regulators aimed at resolving the bond insurer's financial woes could be reached within the next two weeks.

In Europe Tuesday, banks rattled markets with news of more write-downs. Credit Suisse announced an unexpected $2.85 billion write-down and said it found pricing errors on its books. British bank Barclays raised the value of its 2007 write-downs to 1.6 billion pounds ($3.1 billion), but Barclays President Bob Diamond told CNBC Europe that the bank's profit was in line with expectations and that risks are under control.

Shares of Lehman Brothers skidded following a Wall Street Journal report that suggested the bank could face a write-down of about $1.3 billion in its rockiest quarter yet.

Investors are finding value in the beaten-down sector.

Shares of AIG jumped after an article in Barron's called it a "screaming buy."

Also drawing investor attention was a New York Times report that said the Delta Air Lines