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Stocks up on earnings, Spanish debt sale

Stocks stormed higher Tuesday after promising signals about the profitability of U.S. companies and a strong debt auction by Spain. The Dow Jones industrial average rose for the fourth day in five and posted its biggest gain in a month.

European stocks had their best day in four months after Spain, the latest flashpoint in the European debt crisis, attracted strong investor interest at an auction of two-year debt.

Spain's borrowing costs fell, as measured by the yields on Spanish bonds being traded in the market. In recent days, those yields had risen closer to levels that might force Spain to seek an international bailout.

"There's no doubt that gave the market a second wind," Anthony Chan, chief economist with J.P. Morgan Private Wealth management, said of the debt auction. "The market is reassessing and feeling a little better."

The Dow Jones industrial average closed up 194.13 points, or 1.5 percent, at 13,115.54. It was up as much as 210 points Tuesday afternoon. The Dow has had only one 200-point rise this year, a gain of 218 points March 13.

First-quarter results have begun to pour in from companies, and traders have been impressed so far. Tuesday, Coca-Cola said its profits were better than Wall Street analysts had forecast. Goldman Sachs and Johnson & Johnson also posted strong results.

"This earnings season, expectations were low, and it's going to be easy to beat that," said Doreen Mogavero, a floor broker at the New York Stock Exchange and founder and CEO of Mogavero Lee & Co., a small brokerage of stocks for institutional clients.

After nine straight quarters of growth, earnings for companies in the S&P 500 index were expected to be roughly flat for the first quarter. The slowdown was expected because of global threats from Europe and China and the difficulty of beating double-digit gains in recent quarters.

"They talked earnings down for three weeks ahead of the announcements," agreed Kenneth Polcari, a floor broker and managing director with the giant brokerage ICAP Equities. "They've lowered the bar so much that when the announcements come in, it's like, 'Look how good everyone is doing,' " he said.

While stocks have not returned to the lurching moves of last summer, the market has been more volatile in April than it was in January, February and March. In the first quarter, while stocks rose smoothly, there were only six days on which the Dow rose or fell by 100 points. There have been six more in just 11 trading days in April.

Traders said the market is growing more volatile in part because the number of shares traded remains relatively low. About 3.44 billion shares of NYSE-listed stocks were traded Tuesday.

"There's so little volume these days that some movement in any direction is going to be exaggerated by not as many people trading as you'd like to see," said Michael Guli, director of Knight Capital Americas, an international financial services company.

Indexes move more sharply when volumes are low because the action is driven by a handful of short-term traders, rather than by big movements of money managed by institutional asset managers, Polcari said.

" The Nasdaq composite index soared 54.42 points, or 1.8 percent, to 3,042.82. The S&P 500 gained 21.21 points, or 1.6 percent, to 1,390.78. All 10 of its industry groups rose -- nine of them by more than 1 percent.

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