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Stocks End Higher Ahead of Holiday; Energy Gains

Tuesday, 3 Jul 2012 | 1:17 PM ET

Stocks closed near session highs Tuesday on a holiday-shortened trading session, led by energy, as investors cheered a better-than-expected factory orders report.

The stock market will be closed Wednesday for the Independence Day holiday and will reopen, as normal, on Thursday.

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The Dow Jones Industrial Average climbed 72.43 points, or 0.56 percent, to close at 12,943.82. Alcoa led the blue-chip gainers,while Home Depot slipped.

The S&P 500 rose 8.51 points, or 0.62 percent, to end at 1374.02. The Nasdaq rallied 24.85 points, or 0.84 percent, to finish at 2,976.08.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 17, hitting a two-month low.

Among the key S&P sectors, energy led the gainers, while utilities lagged.

“We’re caught in a trading range and we’re in purgatory until we get some clarity on the election, Europe, and the domestic economy,” said Dan Genter CEO and CIO of RNC Genter Capital. “But the good news is that all that’s mostly priced in, so we’re at a reasonable multiple.”

On the economic front, factory ordersrose 0.7 percent in May, according to the Commerce Department. Economists had expected a gain of 0.2 percent, according to a Reuters poll.

Stocks recovered most of their losses in the previous session to end flatamid hopes that the Federal Reserve will take more action to support the economy following a manufacturing report that showed an unexpected contractionfor the first time since July 2009.

"You're in a political year—The [QE] window is shut," said Todd Schoenberger, managing principal at The BlackBay Group. "The Fed would have announced a QE program last meeting when they extended Operation Twist."

High-Flying Travel Stocks
Online travel names, like Priceline and Expedia, are among a few of the S&P 500's top performers for the first half of the year. Jake Fuller, Lazard Capital Markets analyst, and Andre Sequin, RBC Capital Markets analyst, weigh in. "Travel is a lagging economic indicator, not a leading one," says Fuller.

Investors will be looking ahead to government's June employment report at the end of the week. Economists expect a gain of 90,000 jobs, according to a Reuters survey.

European stocks finished higher amid expectations that the ECB will cut interest rates to a record low on Thursday.

Apple briefly hit $600 a share for the first time since April. Earlier, a U.S. judge rejected a request by Samsung Electronics to lift a ban on U.S. sales of its Galaxy Tab 10.1, in another blow for the South Korean tech giant.

Microsoft slipped after the world's biggest software maker announced a $6.2 billion chargeto write down the value of an online advertising agency it bought five years ago.

Also among techs, Research In Motion dipped after Barclays cut its rating on the BlackBerry maker to "underweight" from "equal weight."

Crude oil topped $100 a barrel for the first time in three weeksas tension over Iran increased concerns about threats to supply.

Barclays COO Jerry del Missier became the latest executive to resign on the heels of the bank's interest rate manipulation scandal. The company's CEO Bob Diamond resignedthis morning, while chairman Marcus Agius announced his departure earlier this week.

Ford and GM rallied after both automakers posted monthly sales that jumped 7 percent and 15.5 percent, respectively, topping expectations. Meanwhile, Toyota posted a 60-percent gain in sales, but was slightly less than expected.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

WEDNESDAY: INDEPENDENCE DAY - Bond, equity markets closed
THURSDAY: Weekly mortgage apps, Challenger job-cut report, ADP employment report, ISM non-mfg index, oil inventories, chain-store sales
FRIDAY: Non-farm payrolls

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