Upbeat Earnings, Encouraging Data Lift Stocks

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Strong first-quarter results from companies like Johnson & Johnson, paired with data pointing to strengthening in new-home construction, pushed stocks into the green. 

Today's Markets

The Dow Jones Industrial Average was up 65.2 points, or 0.53%, to 12,267, the S&P 500 gained 7.5 points to 1,313 and the Nasdaq Composite traded higher by 9.6 points, or 0.35%, to 2,745. The FOX 50 was up 5.9 points to 923.  

Materials issues were the top performers on the day as metal markets rallied. U.S. Steel (X) and Silver Wheaton (SLW) both gained more than 2%. Utilities like Public Service Enterprise (PEG) and PPL (PPL) lagged behind. 

Gold prices settled at record-highs as the dollar weakened and traders sought-out the safe-haven asset. The metal climbed $2.20, or 0.15%, to $1,494 a troy ounce, briefly touching the $1,500 level in mid-day trading. 

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Corporate earnings were also in focus Tuesday, with several major players reporting first-quarter results. 

IBM (IBM) unveiled earnings after the close of trading Tuesday.  The technology giant earned $2.41 a share, excluding one-time charges, far higher than the $2.30 analysts were expecting. Chip-maker Intel (INTC) also beat Wall Street's view with earnings of 59 cents a share, compared with the consensus view of 46 cents. Shares of both companies were higher in after-hours trading. 

Johnson & Johnson (JNJ) revealed first-quarter profits of $1.35 a share, excluding chargest, easily exceeding forecasts of $1.26 a share.  The medical-giant also boosted its fiscal year 2011 earnings view to between $4.90 and $5.00 a share. Shares were higher after the report. 

On the economic front, new home construction jumped 7.2% to 549,000 in March -- the highest rate in six months -- easily beating economists' expectations. Permits to begin building homes were up 11.2% to 594,000 for the month.  The market for new homes was hit hard by the economic downturn as a glut of supply of already-existing homes for sale severely weakened demand for new homes being built. 

"The level of starts remains at historically low levels," wrote Michael Gapen, an economist at Barclays Capital, in a research note.

"We foresee a gradual recovery in activity only as an improvement in labor market activity slowly restores demand for housing."

Residential construction issues like Toll Brothers (TOL) and KB Home (KBH) could be swayed by these data. 

Mergers and acquisitions activity has heated up in recent weeks. Samsung Electronics plans on selling its hard disk drive unit to Seagate Technology (STX) for $1.4 billion in cash and stock. 

In energy markets, crude slid more than 2% in the prior trading session on concerns high prices was beginning to cut into demand for oil. 

Light, sweet crude was higher by $1.03, or 0.96%, to $108.15. Prices at the pump continue climbing despite recent losses in oil markets.  A gallon of regular gas cost $3.84 on average nationwide, up from $3.55 last month and $2.86 last year, according to the AAA Fuel Gauge Report. 

The U.S. dollar slipped 0.43% against a basket of world currencies and the euro gained 0.64% against the greenback.

Corporate News

Toyota Motors (TM) plans on extending production cuts until June 3 due to a shortage of parts from Japan. 

Yum Brands (YUM) said the plaintiff that levied a lawsuit alleging its Taco Bell chain used sub-par beef products -- sparking a flood of negative publicity -- voluntarily dismissed the suit. 

Novartis (NVS) unveiled first-quarter profits of $2.77 billion, beating estimates of $2.57 billion. 

Apple (AAPL) sued Samsung Electronics, saying its line of Galaxy tablets and phones copies the iPhone and iPad. 

Nasdaq OMX Group (NDAQ) and IntercontinentalExchange (ICE) submitted a merger proposal to the NYSE Euronext (NYX) after the company rejected the initial bid rivaling the Deutsche Boerse deal. Nasdaq says its deal is worth $2 billion more than the Deutsche Boerse offer and is willing to pay a $350 million fee should it fail to garner approval from regulators. 

Foreign Markets

European shares climbed, but fell from session highs, after high-end clothing companies Burberry and LVMH reported upbeat first-quarter results. 

The English FTSE 100 was up 0.4% to 5,893, the French CAC 40 gained 0.58% to 3,904 and the German DAX was higher by 0.04% to 7,030. 

Concerns over the rate of inflation in China weighed on Asian shares.  The Japanese Nikkei 225 was off 1.2% to 9,441 and the Chinese Hang Seng sunk 1.3% to 23,521. 

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