S'pore shares lower at midday

Stocks manage gains after Fed

NEW YORK (CNNMoney.com) -- Stocks climbed Wednesday, ending a choppy session higher after the Federal Reserve held interest rates steady and hinted it would continue to do so for the foreseeable future. Meanwhile, Apple introduced its new iPad tablet computer.

The Dow Jones industrial average (INDU) gained 42 points, or 0.4%. The S&P 500 index (SPX) gained 5 points, or 0.5%. The Nasdaq composite (COMP) rose 18 points, or 0.8%.

Stocks churned before and after the Fed statement, with gains in technology, telecom and financial stocks tempered by weakness in industrials and commodities. The bank sector surged, with the KBW Bank (BKX) index rising 2.9%.

Apple's new iPad, a crop of major earnings and a House hearing on the government bailout of AIG were also in focus.

Stocks may have staged the late-session advance in anticipation of President Obama's pending State of the Union address, said Michael Sheldon, chief market strategist at RDM Financial Group.

"Some investors may be looking ahead to a less combative and more constructive speech tonight," Sheldon said. "In addition, the market has also had a pretty sharp downdrift over the last few days."

Following that selloff, investors were perhaps willing to scoop up some of the shares that got pummeled.

Ford Motor (F, Fortune 500) and 3M (MMM, Fortune 500) are both expected to report results before the start of trading. Reports are also due on durable goods orders and weekly jobless claims.

State of the Union: In his address to the nation later Wednesday, President Obama is expected to talk about how the government plans to temper the growing deficit over the next decade, even as it continues to promote economic growth in the aftermath of the recent recession.

Obama rattled Wall Street last week when he called for greater restrictions on the biggest financial firms, including limiting the ability of commercial banks to make high-risk trades and stopping them from owning or investing in hedge funds.

He is not expected to directly address that particular proposal, but his rhetoric on the banking system and the economy will be closely watched by Wall Street.

Federal Reserve: The central bank opted to hold the fed funds rate, a key short-term bank lending rate, at a historic low near zero percent, as had been widely expected.

In the closely watched statement, the bankers offered little new guidance, saying the economy has continued to strengthen since December's meeting and that the pace of the slowdown in the labor market is slowing. However, the statement did not provide any insight as to when the Fed plans to loosen its accommodative policy -- something investors are very focused on.

One notable surprise was that Kansas City Fed president Thomas M. Hoenig disagreed with the group's decision to state that conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

Hoenig, a known inflation hawk, thought that activity was picking up at a pace sufficient to change the language to suggest that rates could rise a little sooner.

The phrase "extended period of time" suggests rates will be held steady for at least six months if not more, said James Barnes, vice president and fixed income co-manager at National Penn Investors Trust. Hoenig's dissent indicates he might like to see rates start to move higher in the first half of the year.

However, rates are unlikely to move anytime soon, Barnes said. The combination of low interest rates and the injection of trillions of dollars of stimulus into the system helped fuel the stock market rally last year and take the edge off the worst recession since the Great Depression. The Fed is unlikely to step back just yet, especially when the recovery is still tentative.

"The economic news has in some ways been more positive than anticipated, outside of what we've seen in housing," Barnes said. "But we're still a long ways away from when the Fed is going to be comfortable raising rates or pulling money off the table."

With his term set to expire Sunday, questions remain about whether Fed Chief Ben Bernanke has enough votes in the Senate to force a confirmation vote. Worries that his term might not be renewed contributed to last week's massive stock selloff, in which the Dow, S&P 500 and Nasdaq all lost 5% in three sessions.

Apple: Apple (AAPL, Fortune 500) revealed the new iPad - a 1.5-lb, half-inch wide tablet computer that falls between a smartphone and a laptop.

Apple shares initially dipped as the announcement was underway, but reversed course to end about 1% higher after the lower-than-expected starting price of $499 was announced. Rumors had pegged the price as being closer to $1,000.

Apple shares are down about 1% year-to-date as of Wednesday's close, after spiking 147% in 2009.

Housing: New home sales plunged to a 9-month low, according to a Census Bureau report released Wednesday. Sales fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from a revised rate of 370,000 in November.

Quarterly results: Shares of Caterpillar (CAT, Fortune 500) slid 4% after the heavy-machinery maker issued a 2010 earnings forecast of $2.50 per share, short of the $2.71 per share analysts were expecting, on average. The Dow component said that a global economic recovery only favors some of its business units rather than all.

Caterpillar also reported weaker quarterly earnings that nonetheless topped estimates and weaker revenue that missed expectations.

Fellow Dow component Boeing (BA, Fortune 500) reported a quarterly profit versus a year-ago loss on higher quarterly revenue. Results topped forecasts. However, looking forward, the company forecast 2010 earnings of $3.70 to $4 a share versus forecasts for a profit of $4.26 per share. Nonetheless, Boeing stock rallied 7%.

After the close Tuesday, Yahoo (YHOO, Fortune 500) reported a quarterly profit that reversed a year-ago loss, as the online advertising market showed some signs of life. Results were better than expected. The Internet behemoth also reported weaker quarterly revenue that topped estimates. Shares were little changed Wednesday.

World markets: In overseas trading, Asian and European markets tumbled again on concerns about China's bank lending curbs. Global stocks got hammered Tuesday after Standard & Poor's warned it could cut its debt rating on Japan.

Meanwhile, China implemented some of the bank curbs that had been hinted at last week. China is one of the main drivers of the global economy and any slowdown would have a broad impact.

Commodities and the dollar: The dollar reversed course after the Fed statement, falling versus the euro and gaining against the yen.

COMEX gold for February delivery fell $13.80 to settle at $1,084.50 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery fell $1.04 to settle at $73.67 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.60% from 3.62% late Tuesday. Treasury prices and yields move in opposite directions.  

Banks drag on stocks

NEW YORK (CNNMoney.com) -- Stocks struggled Tuesday afternoon as a late-session selloff in the financial sector cut into an earlier rally that had been sparked by Apple's record quarterly results and a stronger reading on consumer confidence.

After the close, Yahoo (YHOO, Fortune 500) reported a quarterly profit, reversing a year-ago loss, as the online advertising market showed some signs of life. The company also reported weaker quarterly revenue that topped estimates. Shares initially slipped after hours before rebounding.

The Dow Jones industrial average (INDU) lost 2 points or less than 0.1%. The S&P 500 index (SPX) shed 4 points, or 0.4%. The Nasdaq composite (COMP) slid 7 points, or 0.3%.

After seesawing through the early morning, stocks turned higher near midday, thanks to gains in financial and consumer shares. But the advance petered out by the end of the session.

Financials led the retreat, with the KBW Bank (BKX) index falling 2.2%.

Stocks mustered slim gains Monday as fears about the bank sector lessened, along with opposition to Federal Reserve Chairman Ben Bernanke serving for a second term.

Investors are still climbing back after last week's battering, in which the Dow, S&P and Nasdaq all plunged 5% in the last three sessions of the week.

Although Apple provided investors with some optimism throughout the session, that wasn't enough to keep stocks higher. The ongoing Fed meeting was also in focus.

Joseph Saluzzi, co-head of equity trading at Themis Trading, said that last week's selloff showed a change in market character. "We've had a lot of little selloffs in the last nine months, but last week was different," he said.

That difference was reflected in the pace of the selling last week and the spike in the VIX - Wall Street's so-called fear gauge - to a six-month high, he said. The VIX has dropped about 17% since late Friday, but the risk of another 5% to 7% correction in the short term remains, he said.

Federal Reserve: The central bank begins its two-day policy setting meeting amid ongoing questions about whether the Fed chairman's term will be renewed.

The central bankers are widely expected to hold interest rates steady at historic lows near zero and to signal that they will continue to do so for the time being. A statement is expected Wednesday at around 2:15 p.m. ET.

However, investors will still scour the statement for hints about when the Fed may start to raise interest rates or withdraw some of the trillions of dollars of stimulus it had put into the economy over the last few years.

The combination of sustained low interest rates and more money in the system played a major role in boosting the stock market last year and stopping the recession from becoming a Depression.

With his term set to expire on Jan. 31, questions remain about whether Fed Chairman Bernanke has enough votes in the Senate to force a confirmation vote. However, those worries have lessened this week.

"There's an easing of people's minds this week with respect to Bernanke and that's helping, although some people would still like to get rid of him," said Jack Reutemann, founder of Research Financial Strategies.

Apple: After the close of trading Monday, Apple (AAPL, Fortune 500) reported quarterly earnings and revenue that topped estimates, thanks to strong sales of iPhones and Macintosh computers. Quarterly revenue surged to a record $15.7 billion. The company is on track to debut its greatly-anticipated new tablet computer on Wednesday.

Corporate results: Dow component Travelers Companies (TRV, Fortune 500), the U.S. property-casualty insurer, reported higher quarterly earnings and revenue that beat estimates thanks to strong gains in underwriting and investment. Shares rose 3%.

Chemical maker DuPont (DD, Fortune 500) reported a profit versus a year-ago loss and a rise in revenue, thanks to improving market trends and cost cutting. Results topped analysts' estimates.

DuPont also boosted its 2010 earnings forecast due in part to an improving economy. Shares of the Dow component were little changed.

Consumer products maker Johnson & Johnson (JNJ, Fortune 500) reported weaker earnings and stronger revenue versus a year ago, both of which topped forecasts.

The company also forecast a full-year 2010 profit of $4.85 to $4.95 per share versus analysts' expectations for a profit of $4.94 per share, sending the stock a little lower in afternoon trading.

Verizon Communications (VZ, Fortune 500) reported a fourth-quarter loss due to layoff charges. Excluding items, the profit was in line with estimates. The telecom also reported higher revenue that missed estimates. Verizon said it added 2.2 million mobile subscribers, topping forecasts for adds of 1.5 million.

Looking forward, the company said it is seeing a slower-than-expected economic recovery and that it expects to cut 6% of its workforce this year, or around 13,000 jobs.

Confidence: The Consumer Confidence index, from the Conference Board, rose to 55.9 in January from 53.6 in the previous month, versus forecasts for a reading of 53.5.

Housing: A key report that showed prices fell for the first time in seven months. The S&P/Case-Shiller 20-city home price index fell 0.2% in November from October and fell 5.3% from a year ago, in a bigger-than-expected drop.

World markets: Global stocks were under pressure after Standard & Poor's warned it could cut its debt rating on Japan and China implemented some of the bank curbs that had been hinted at last week.

China is one of the big drivers of the global economy and any indication that it is slowing down has an impact on world markets.

Asian markets ended lower, with the Japanese Nikkei tumbling 1.8%. European markets shook off earlier gains to stand flat to higher.

Commodities and the dollar: The dollar gained versus the euro and fell against the yen.

COMEX gold for February delivery rose $2.60 to settle at $1,098.30 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery fell 55 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.60% from 3.61% late Monday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 880 million shares. On the Nasdaq, decliners topped advancers by eight to five on volume of 1.68 billion shares. 

Stocks try to recharge

STI down 2% at midday

Wall Street's worst day in months

NEW YORK (CNNMoney.com) -- Stocks tumbled Thursday after the Obama administration announced a proposal to increase regulation of the nation's biggest financial firms, including limiting the size and scope of their trading operations.

The Dow Jones industrial average (INDU) fell 213 points, or 2%. The S&P 500 index (SPX) slid 21 points, or 1.9%. The Nasdaq composite (COMP) lost 25 points, or 1.1%. The three gauges saw the biggest one-day point declines since late October.

Stocks had fallen through the morning as lingering worries about China's lending practices hit commodities and the broader market. Reports showing a rise in jobless claims and a drop in manufacturing activity added to the pressure, overshadowing Goldman Sachs' better-than-expected profit report.

But declines accelerated as investors geared up for and then dissected the White House's afternoon announcement.

"China is still lingering today and then the Obama announcement comes out and that's when you saw the selling really pick up," said Steven Goldman, market strategist at Weeden & Co.

Obama called for greater government regulation of the nation's biggest financial institutions, including limiting commercial banks ability to make high-risk trades and stopping them from owning or investing in hedge funds.

This would separate commercial and investment banks, a throwback to a Depression-era law that was basically thrown out a decade ago.

Big banks such as JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Bank of America (BAC, Fortune 500) would be impacted in particular.

The plan was in tune with the proposal of former Fed president and current economic advisor Paul Volcker, who has called for greater restrictions on institutions in the wake of the financial crisis.

"On one hand, you want banks to lend more to help stimulate the economy," Goldman said. "But if this means banks can't trade and are going to make less profit and therefore lend less, that's just more uncertainty."

After the close, American Express (AXP, Fortune 500) reported higher earnings that beat forecasts on flat revenue that also beat estimates. Shares of the financial services firm gained 2% in extended hours trading.

Also after the close, Google (GOOG, Fortune 500) reported a big jump in revenue that topped estimates thanks to a rebound in the advertising market. Shares lost 4% in a "sell the news" reaction.

General Electric (GE, Fortune 500) and McDonald's (MCD, Fortune 500) are due to report Friday.

Declines were broad based, with 28 of 30 Dow stocks sliding, led by IBM (IBM, Fortune 500), Exxon Mobil (XOM, Fortune 500), Chevron (CVX, Fortune 500), Caterpillar (CAT, Fortune 500), Coca-Cola (KO, Fortune 500) and the bank stocks.

Stocks were also vulnerable after the three major indexes ended at more than 15-month highs on Monday.

Results: Goldman Sachs said it earned $8.20 a share in the fourth quarter, trouncing forecasts for a profit of $5.20 per share, thanks to strong gains in its investment unit. Goldman also reported full-year 2009 revenue that doubled from a year ago.

The company also attempted to address criticism of its pay packages one year after accepting government money at the height of the financial crisis. Goldman paid its employees $16.2 billion in salaries and bonuses last year, up almost 50% from 2008, but still less than what had been expected.

Goldman shares fell 4%. Other big bank shares fell, but some of the regional banks were up, keeping the overall sector near unchanged. Fifth Third Bancorp (FITB, Fortune 500), Keycorp (KEY, Fortune 500) and Regions Financial (RF, Fortune 500) all gained.

Starbucks (SBUX, Fortune 500) reported higher quarterly sales and earnings that topped estimates in a report released late Wednesday. The coffee chain's results were driven by growth at stores open a year or more, a retail metric known as same-store sales. Shares gained 2%.

Also late Wednesday, eBay (EBAY, Fortune 500) reported higher quarterly sales and earnings that topped estimates. The Internet retailer also boosted its 2010 earnings forecast.

Economic news: The number of Americans filing new claims for unemployment rose to 482,000 from 446,000 in the prior week. Economists surveyed by Briefing.com thought claims would fall to 440,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4,599,000 from 4,617,000 in the previous week. Economists expected 4,598,000 claims, on average.

The Philadelphia Fed, a regional reading on manufacturing, fell to 15.2 in January from 22.5 in December versus forecasts for a drop to 18.

A third report showed that the index of leading economic indicators rose 1.1% in December after rising 1% in the previous month. Economists surveyed by Briefing.com thought it would rise 0.7%.

World markets: Asian markets ended lower, with the exception of the Japanese Nikkei. European markets ended lower.

Commodities and the dollar: The dollar fell versus the euro and the yen, reversing morning gains following Obama's speech.

Commodities were also under pressure because of China's curbs, with China being a big buyer of commodities. Reports Wednesday said China has asked banks to slow the pace of lending this year in an attempt to get ahead of inflation.

COMEX gold for February delivery fell $9.40 to settle at $1,103.20 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery slipped $1.66 to settle at $76.08 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.59% from 3.65% late Wednesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by over three to one on volume of 1.5 billion shares. On the Nasdaq, decliners topped advancers by three to one on volume of 2.91 billion shares. 

Stocks get knocked back

NEW YORK (CNNMoney.com) -- Stocks slumped Wednesday as a strong dollar and questions about China's lending practices slammed commodities, one of the leaders of the recent rally.

IBM dragged on the tech sector as investors picked apart the company's outlook one day after sending the stock higher.

The Dow Jones industrial average (INDU) fell 122 points, or 1.1%, according to early tallies, after having fallen as much as 207 points in the morning. The S&P 500 index (SPX) lost 12 points, or 1%. The Nasdaq composite (COMP) gave back 29 points, or 1.3%.

A stronger dollar pressured dollar-traded commodity prices and stocks. The sector was also hit by reports that China intends to slow the pace of lending this year in an attempt to get ahead of inflation.

"China's efforts to get their banks to lend less really hit commodities hard, because China is the marginal buyer of commodities," said David Chalupnik, head of equities at First American Funds.

Commodities were also under pressure in reaction to the dollar, which firmed up in comparison to a weak euro and in response to the surprise Republican Senatorial victory in Massachusetts. (For more details, click here.)

Commodities and commodity stocks were among the big leaders of the rally over the last year and the weakness in the sector dragged on the broader market Wednesday.

IBM and the techs led stocks higher Tuesday and IBM and the techs were among the biggest drags Wednesday, as investors backtracked one day after the Dow, S&P 500 and Nasdaq ended at the highest levels since Sept. 2008.

With IBM, the earnings and profit margins were good, but the revenues were mostly in line with forecasts and the outlook was good not great, relative to high expectations, Chalupnik said.

"Expectations are higher after two quarters of cost-cutting fueled earnings growth, but little revenue growth," Chalupnik said. "I think the market now needs to see the revenues come in strong. Just meeting is not enough."

Declines were broad based, with 26 of 30 Dow components falling, led by IBM, Hewlett-Packard (HPQ, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).

IBM: The tech leader reported higher quarterly sales and earnings late Tuesday that topped estimates. But investors took a "sell the news" approach and sent shares 3% lower Wednesday.

IBM said it earned $3.59 per share versus $3.28 a year earlier. Analysts surveyed by Thomson Reuters thought it would earn $3.47 per share. Sales inched up to $27.23 billion from $27 billion in the prior year versus forecasts for a drop to $26.96 billion.

Looking forward, IBM said it expects earnings per share of at least $11 for 2010.

Banking results: Dow component Bank of America (BAC, Fortune 500) said losses widened to $5.2 billion in the fourth quarter of last year, partly due to the bank paying back government bailout funds. BofA said the repayments shaved $4 billion off its bottom line.

The company was expected to post a loss of $3.9 billion, according to forecasts. On a per-share basis, BofA lost 60 cents versus forecasts for a loss of 52 cents. Shares were barely changed.

Morgan Stanley (MS, Fortune 500) reported its second-straight quarterly profit, one year after posting a massive loss. The financial firm said it earned $617 million for the quarter versus a loss of $11 billion a year ago. The stock fell around 1%.

Wells Fargo (WFC, Fortune 500) reported a surprise profit of $2.82 billion, or 8 cents a share, versus forecasts for a small loss. The bank benefited from stronger fee income, even as it repaid $25 billion in bailout money.

Health care: Investors were also assessing the surprise Republican election to the Massachusetts Senate seat previously held by the late Ted Kennedy.

The upset victor could kill health care reform by ending the Democrats' filibuster-proof majority in the Senate. Additionally, House Democrats are mostly opposed to the idea of passing the Senate health care bill.

Investors may also be betting that the change in the balance of power in the Senate will mean other Congressional spending programs could be cut back or set aside, which had an impact on the dollar.

Economy: Building permits, a measure of builder confidence, rose to a 653,000 unit annual rate in December from a 589,000 rate in November, the government reported. Permits were expected to rise to a 590,000 rate, according to a consensus of economists surveyed by Briefing.com.

But housing starts fell to a 557,000 unit annual rate from a 580,000 unit rate in November. Economists thought starts would fall to a 572,000 unit rate.

The Producer Price Index (PPI), a measure of wholesale inflation, rose 0.2% in December after climbing 1.8% in the previous month. Economists thought it would hold steady. The so-called core PPI, which strips out volatile food and energy prices, was flat versus forecasts for a gain of 0.1%. Core PPI rose 0.5% in the prior month.

World markets: Asian markets ended lower, with China losing 3% on the debt issue. European markets fell in late trading.

Commodities and the dollar: The dollar gained versus the euro and the yen.

COMEX gold for February delivery fell $27.40 to settle at $1,112.60 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery fell $1.87 to settle at $77.62 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose in a classic flight-to-quality, lowering the yield on the 10-year note to 3.65% from 3.69% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by almost three to one on volume of 850 million shares. On the Nasdaq, decliners beat advancers by nearly three to one on volume of 2.03 billion shares. 

Asian shares close lower

Wall Street recharges the rally

Citigroup's quarterly loss, a stronger dollar and Kraft's buyout of Cadbury were also in the mix.

The Dow Jones industrial average (INDU) gained 115 points, or 1.1%. The S&P 500 index (SPX) added 14 points, or 1.3%. The Nasdaq composite (COMP) rose 32 points, or 1.4%. The Dow and the S&P 500 ended at fresh 15-month highs and the Nasdaq ended at a new 16-month high.

After the close, IBM (IBM, Fortune 500) reported higher quarterly sales and earnings that topped estimates. But investors took a 'sell the news' approach and sent shares 1% lower in extended-hours trading.

IBM said it earned $3.59 per share versus $3.28 a year ago. Analysts surveyed by Thomson Reuters thought IBM would earn $3.47 per share. Sales rose modestly to $27.23 billion from $27 billion a year ago. Analysts thought sales would dip to $26.96 billion.

Looking forward, IBM said it expects earnings per share of at least $11 for 2010.

Stocks opened weaker following Citigroup's results, but soon turned higher as investors found reason to jump back into the market after Monday's holiday.

Gains were broad based, with 26 of 30 Dow components rising, led by Caterpillar (CAT, Fortune 500), IBM (IBM, Fortune 500), Johnson & Johnson (JNJ, Fortune 500), McDonald's (MCD, Fortune 500), 3M (MMM, Fortune 500), Merck (MRK, Fortune 500), 3M (MMM, Fortune 500) and Procter & Gamble (PG, Fortune 500).

Health care stocks jumped on bets that a Republican election to the Massachusetts U.S. Senate seat previously held by the late Ted Kennedy could stall or kill health care reform by ending the Democrats' filibuster-proof status. Polls were due to close at 8 p.m. ET.

All financial markets were closed Monday for the Martin Luther King holiday. Markets on Friday ended lower despite better-than-expected profit reports from JPMorgan Chase and Intel.

After a robust 2009, stocks were expected to drift at the beginning of the new year. But the momentum has remained positive and year-to-date, the S&P 500 is up 3%.

"The first half of 2010 is probably going to be an extension of the latter part of 2009," said Tommy Williams, president at Williams Financial Advisors. "Earnings are going to show strength versus a year ago, retail sales are picking up and unemployment will start to show some improvement."

However, he said that the second half of the year is likely to be trickier. "In the second half, there appear to be headwinds that could slow things down," Williams said. "But in the short term, I am optimistic."

Quarterly results: Financial firm Citigroup (C, Fortune 500) reported a $7.6 billion quarterly loss, partly due to the bank paying back the government $20 billion in bailout funds. On a per-share basis, Citigroup lost 33 cents, in line with forecasts, after reporting a loss of $2.44 a share in the prior year's quarter.

On the upside, the company said consumer credit losses dropped in the quarter, and that it also set aside less money for bad loans during the quarter.

Some 57 of the companies in the S&P 500 are due to report results this week, with the focus on banks. Wells Fargo (WFC, Fortune 500), Bank of America (BAC, Fortune 500), Morgan Stanley (MS, Fortune 500), American Express (AXP, Fortune 500) and a number of regional banks are all due.

S&P 500 earnings are expected to have risen 186% versus a year ago and revenue is expected to have risen 7% according to the latest forecast from earnings tracker Thomson Reuters.

But the jump is largely attributable to a spike in financial sector results versus an abysmal fourth quarter of 2008 amid the height of the financial crisis. Without the financial sector, earnings growth slips to 8% and revenue growth falls to 1%.

Kraft buys Cadbury: The British candy company agreed to a larger $19.5 billion takeover offer from U.S. food maker Kraft Foods (KFT, Fortune 500) in a deal that puts an end to a four-month fight. The board on Tuesday recommended shareholders take Kraft's cash-and-stock offer in a move that will create the world's biggest chocolate maker.

Shares of Kraft, a Dow component, fell 0.6%, cutting earlier losses. American-traded shares of Cadbury (CBY) rose 6%.

World markets: Asian markets ended mixed, with Japan's Nikkei lower and Hong Kong's Hang Seng higher. European markets ended higher, reversing earlier losses.

Commodities and the dollar: The dollar gained versus the euro and the yen.

COMEX gold for February delivery rose $9.50 to settle at $1,140 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery rose $1.02 to settle at $79.02 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.69% from 3.67% late Friday. Treasury markets were closed Monday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by over three to one on volume of 1.036 billion shares. On the Nasdaq, advancers topped decliners by over two to one on volume of 2.08 billion shares.