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Dow Up Nearly 100, Led by Merck, Chevron

Stocks rallied Tuesday after a manufacturing report blew past expectations and some decent earnings reports.

The Dow Jones Industrial Average was up more than 70 points in morning trading, led by Merck after the drug maker hit its earnings target.

Alcoa and Chevron weren't far behind, as the dollar fell, boosting commodity prices.

This came after the Dow dropped about 50 pointson Friday. The Dow and the S&P 500 have been unable to muster a two-day winning streak since February 1-2. But the major averages are slightly higher so far for the month of February.

The Empire State manufacturing index jumped to 24.91in February from 15.92 in January; economists surveyed by Reuters had expected the gauge to rise to 17 or 18.

Still to come: The National Association of Home Builders will issue its monthly sentiment index at 1 pm, and a slight increase in that number is expected as well.

Kraft Foods was one of only three decliners on the Dow. The food giant edged past earnings expectations but revenue fell short.

US-traded shares of Barclays jumped more than 10 percent after the British bank reported its earnings nearly doubledin 2009.

Whole Foods shares rose ahead of its earnings, due out after the bell today.

The Greek debt crisis continues to be a focus for investors, with the European Union pressing Greece for more budget reductions.

Toyota

with the Financial Times saying the automaker will temporarily halt production at two U.S. factories because of slowing sales. Toyota is also planning an aggressive sales incentive program set to get underway in March.

AstraZeneca signed a $1.2 billion deal for the rights to a next-generation arthritis drug manufactured by Rigel Pharmaceuticals.

And the FT quotes UAL Corp. chairman and CEO Glenn Tilton as saying a merger between his airline and Continental has some logic behind it.

This Week:

TUESDAY: Fed's Lockhart, Kocherlakota speak; NAHB housing index; Earnings from Whole Foods after the bell
WEDNESDAY: Weekly mortgage apps; housing starts; import prices; industrial production; Fed's Plosser speaks; Fed minutes; Earnings from HP, ADI, Nvidia, Priceline
THURSDAY: PPI; weekly jobless claims; leading indicators; Philly Fed; weekly crude inventories; Fed's Duke, Lockhart & Bullard speak; Earnings from Wal-Mart, DirecTV, CBS and Dell
FRIDAY: CPI; Earnigns from JCPenney

Send comments to cindy.perman@nbcuni.com.