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Stocks Chug Higher as AmEx Tops Forecasts

Stocks made a second attempt at a rally as investors cheered earnings surprises from American Express and others.

After a quick pop out of the gate, the first rally fizzled as a report showed consumer confidence fell to a record low in January.

"Consumers remain quite pessimistic about the state of the economy," Lynn Franco, director of the Conference Board Research Center, said in a statement.

But stocks chugged higher again, with financials, including American Express, Citigroup and Bank of America at the front of the Dow pack.

Citigroup had steadily moved higher today but shot up after CEO Vikram Pandit reiterated his plan to slash costs. Speaking at a Citigroup financial-services conference in New York, Pandit said he is targeting $32 billion expenses at Citicorp in 2009, down from $37.5 billion in 2008.

Meanwhile, American Express helped buoy the Dow after the credit-card maker reported late Monday that its fourth-quarter earnings dropped 72 percent but topped expectations.

Investors had expected the worst after dismal results last week from rival Capital One that showed credit-card spending fell 10 percent.

Bristol Myers Squibb also surpassed forecasts as strong sales of blockbuster blood thinner Plavix help the drug maker swing to a huge profit.

These were the latest in a series of earnings surprises: More than half of the S&P firms that reported earnings have topped expectations.

Of course, there was still plenty of gloom in earnings.

DuPont posted a larger-than-expected quarterly loss and lowered its 2009 outlook, saying it experienced lower paint sales because of the slump in the auto industry.

Verizon shares were the biggest drag on the Dow after the telecom met its earnings target but reported a slowdown in its wireless business.

President Barack Obama will head to Capitol Hill to build support for a proposed $825 billion stimulus package. Obama says the package is key to helping the economy from its current economic slump.

The president had an early political victory Monday when Timothy Geithner won confirmation as US Treasury secretary. Geithner vowed to act quickly in the face of the financial crisis.

William Dudley will take Geithner’s old job as the head of the New York Federal Reserve Bank, a source familiar with the decision told Reuters.

Texas Instruments pleased investors will a smaller-than-expected drop in quarterly profit Monday. The chip-maker said it would slash 12 percent of its workforce.

This Week:

TUESDAY: Fed 2-day meeting starts; Earnings from Yahoo and Sun Micro
WEDNESDAY: Davos Economic Forum begins; Weekly mortgage applications; Weekly crude inventories; Fed decision on interest rates; Earnings from AT&T, Boeing, Novartis, Pfizer, Wells Fargo, Boston Scientific, Qualcomm and Starbucks
THURSDAY: Weekly jobless claims; durable-goods orders; new-home sales; Earnings from Altria, Amazon, Broadcom, Colgate-Palmolive, Ford, Eli Lilly and Wyeth
FRIDAY: Q4 GDP; consumer sentiment; Earnings from Chevron, ExxonMobil, P&G and Honeywell

Send comments to cindy.perman@nbcuni.com.