Tech stocks drive early market gains
NEW YORK — Stocks moved higher early Tuesday for the second day in a row, led by technology companies.
Cisco Systems Inc. rose the most of the 30 stocks in the Dow Jones industrial average, gaining 2 percent. Microsoft Corp. and Oracle Corp. also rose 2 percent.
Bank of America Corp. sank more than 3 percent, the worst in the Dow. Other bank stocks were mixed. Financial stocks have been hit hard in recent weeks over worries about Europe's debt crisis and the possibility that the U.S. could slip back into recession.
Stocks rose broadly despite another weak report on the U.S. housing market. The Commerce Department said the number of people who bought new homes in July fell 1 percent, the fourth monthly drop. New home sales are on track to have their worst year in half a century.
UBS rose 3 percent in early trading. The Swiss bank said it planned on cutting 3,500 jobs worldwide in the hope of saving $2.5 billion by the end of next year. UBS's stock has dropped 20 percent this year.
The Dow Jones industrial average rose 130 points, or 1.2 percent, to 10,985 in morning trading. The Dow also rose sharply in morning trading Monday, but ended with a gain of just 37.
The S&P 500 index rose 14 points, or 1.3 percent, to 1,138. The Nasdaq rose 39 points, or 1.7 percent, to 2,384.
H.J. Heinz Co. fell 3 percent after the world's largest ketchup maker said profits fell 6 percent in the most recent quarter. Heinz also lowered its earnings estimate for the year.
Better reports on manufacturing in Europe and China lifted world markets. Hong Kong's Hang Seng rose 2 percent and Germany's DAX rose 0.8 percent. Investors are also hoping Fed Chairman Ben Bernanke will announce some kind of assistance Friday for the U.S. economy.
Major indexes eked out minor gains Monday following a four-week losing streak. The S&P 500 index has dropped 16 percent since July 22 and 13 percent this month. The broad market measure is on track for its worst August since the Asian financial crisis rattled world markets in 1998.
There's still fear that the U.S. could slip into another recession. Investors will be watching Bernanke's speech at the Fed's annual retreat in Jackson Hole, Wyo., on Friday. It was at the same conference a year ago that Fed Chairman Ben Bernanke made the case for buying Treasury bonds to push interest rates lower and spur spending. That $600 billion bond-buying program was credited with giving stock markets a lift but it ended in June.
The yield on the 10-year Treasury note edged up to 2.11 percent from 2.10 percent late Monday. The yield fell below 2 percent last week, its lowest on record, as investors sought refuge from turmoil in the stock market.
Gold, which edged above $1,900 Monday, fell $13.10 to $1,880 an ounce. Gold has jumped 15 percent this month to new highs as nervous investors shift money into hard assets.