U.S. stocks rose Tuesday, buoyed by hopes for a deal between Greece and its international creditors.
The Dow Jones Industrial Average climbed 139.55 points, or 0.8%, to 17868.76. Coca-Cola Co. was among the biggest gainers in the index after its fourth-quarter profit beat analyst expectations
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The S&P 500 rose 21.85 points, or 1.1%, to 2068.59, its highest close of 2015. The Nasdaq Composite gained 61.63 points, or 1.3%, to 4787.64.
Apple Inc.'s shares climbed 1.9% and closed with a market capitalization above $700 billion for the first time, the first U.S. company to do so.
The U.S. stock market has seen bumpy trading in 2015. The Dow had been down as much as 3.7% for the year as of Jan. 30, but now it is nearly flat year-to-date, up 0.3%. The S&P 500 is currently up 0.5% for the year.
Tuesday's stock-market move reversed Monday's losses, when stocks fell amid worries about the standoff between Greece and its creditors. The standoff pushes Greece closer to a default and has revived fears of the prospect of a forced exit by the country from Europe's single-currency union.
"Markets year-to-date have been very volatile and not going anywhere," said Brian Sullivan, president of Regions Investment Management, which manages roughly $9.7 billion. "It's one thing to have a calm market that doesn't go anywhere, but with this volatility you're taking a daily risk and not getting paid for it. It's wearing on investors and making them nervous that they're flipping a coin or gambling in Vegas."
European stocks climbed on Tuesday as investors continued to eye talks between Greece and its creditors. The new Greek government is sticking to its pledge to end some debt-reduction measures demanded by its creditors. Still, many investors believe a deal will be reached and Greece won't exit the eurozone. France's CAC 40 gained 1% and Germany's DAX added 0.9%.
"If Greece were to leave (the eurozone), I don't think that's welcome on anyone's plate," said Stephen Carl, head equity trader at New York-based brokerage firm The Williams Capital Group. "Leaning the other way is certainly a positive for the market."
Russ Koesterich, chief investment strategist at BlackRock Inc., agreed that concerns about Greece's future in the eurozone were contributing to market volatility, but he said a bigger concern for U.S. investors is corporate earnings and guidance for 2015, as well as expectations for when the Federal Reserve will raise short-term interest rates.
Defensive stocks such as utilities have performed strongly in recent years, viewed as a refuge in a low-interest-rate environment. But with many investors anticipating rates to rise this summer, shares of utilities have in recent sessions been "crushed," Mr. Koesterich said. In the past week, shares of utilities in the S&P 500 have fallen 3.4%, making it the worst-performing sector during that period. On Tuesday, those shares were big gainers, though, up 2.1%.
Energy stocks declined, weighed down by the falling price of oil. Crude-oil futures fell 5.4% to $50.02 a barrel, and shares of energy companies in the S&P 500 followed suit, declining 0.2%, the only sector in the red for the day. Month to date, however, both crude-oil futures and energy shares have been on the rise, up 3.7% and 5.4%, respectively. The recent bounce follows months of declines, and the price of crude oil is still half of its value in late June. Energy companies in the S&P 500 are off roughly 20% in that same period.
In other news, optimism among small-business owners retreated slightly in January from the prior month, according to a report released Tuesday by the National Federation of Independent Business.
Coca-Cola shares rose 2.8%, helping lead the Dow higher, after the company reported fourth-quarter profit and revenue that topped analyst expectations. The beverage company, which derives most of its profit overseas, said 2015 would be a "transition year" as it deals with cost-cutting plans and currency impacts.
Qualcomm Inc. said it reached a settlement with the Chinese government in its investigation into whether the U.S. chip maker violated the country's antimonopoly law. Shares rose 4.7% as some investors viewed the fine as sparing Qualcomm some of the worst penalties authorities could have given.
Starwood Hotels & Resorts Worldwide Inc. plans to spin off its vacation ownership business into a separate company, a move it said would take advantage of the increasing growth opportunities in the timeshare industry. Shares rose 6.6%.
Shares of CVS Health Corp. gained 2.1% as growth in its Medicaid business helped offset a decline in retail sales after the company decided to stop selling cigarettes.
Gold futures lost 0.7% to $1231.60 an ounce. Treasury prices fell, pushing the yield on the 10-year note up to 1.991% from 1.948% on Monday.