Stocks rose for a second straight day Tuesday as cyclicals like energy and materials advanced. Retail stocks gained after the Senate cleared a hurdle toward extending unemployment benefits.
Stocks had been lower for much of the day amid revenue weakness in the latest round of earnings reports and another disappointing housing report.
Materials, energy and industrials were among the day's best performers; health-care stocks were among the weakest.
The Dow Jones Industrial Average gained 75.53, or 0.7 percent, to close at 10,229.96, after being down double that earlier.
Home Depot , Walmart and Alcoa led the rally, all up more than 2 percent.
Some speculated that the afternoon rally may have been in anticipation of some action by the Fed to help loosen up lending — perhaps that it might eliminate interest paid on excess bank reserves held at the Fed. Fed Chairman Ben Bernanke testifies before Congress on Wednesday.
The Senate voted 60 to 40 to end the filibuster and move toward a final voteon extending jobless benefits, which is expected later today. The House is expected to approve the measure on Wednesday and send it to President Obama to sign into law.
Goldman Sachs shares rose 2.2 percent as the banking giant beat earnings expectations but, true to this season, revenue missed.
Johnson & Johnson shares fell after the health-care giant reported a increase in earnings but flat revenueamid ongoing recalls of popular nonprescription medicines. The company also reduced its profit forecast for the year by 15 cents a share.
Techs, some of the best performers on Monday, ended mixed after disappointing earnings late Monday from IBM and .
Analyst reactions to the tech firms have been mixed: JPMorgan raised its price target on IBM to $144.50 from $142.50, while at least two brokerages cut their price targets.
And, Macquarie raised its price target on Texas Instruments to $25 from $24.90, but at least two brokerages cut their ratings and price targets.
“Every quarter, the hurdle gets higher—more has to come from revenue growth,” Mark Eibel, director of client investment strategies at Russell Investments told CNBC.
“The reason why revenue is the focus is that investors are looking for a reason to believe that things are getting better," Eibel explained. "They’re not getting it from the macro as much, so they’re looking for any indication. So that’s why the bar is higher.”
Intel , which delivered an encouraging earnings report last week, eked out a gain as the chip giant is nearing a settlement with the FTC over antitrust allegations, a case that has dogged the company for more than 10 years.