Strong earnings reports push U.S. stocks higher

NEW YORK, Jan. 11 （Xinhua） -- The U.S. stocks snapped a 3-day losing streak to close higher on Tuesday as strong earnings reports helped inject confidence into the market.

Alcoa, the aluminum manufacturer which is traditionally the first component of the Dow Jones Industrial Average to report results, beat the market expectation on Monday by saying it had earned 21 cents a share in the fourth quarter of 2010, excluding one-time items, compared with 1 cent a share last year.

Meanwhile, Sears soared after the retailer posted an outlook that exceeded expectations as sales rose in several categories, including toys and sporting goods.

Luxury retailer Tiffany reported a huge jump in holiday sales, and used the 11-percent year-over-year gain as a reason to boost its full-year outlook for 2011.

Oil prices surged on Tuesday, giving momentum to some energy- related stocks. Consol Energy, which reported coal production rose 8.4 percent in the fourth quarter, rose nearly 4 percent on Tuesday.

Meanwhile, the U.S. Commerce Department said on Tuesday that wholesale inventories fell 0.2 percent to a seasonally adjusted 425.5 billion U.S. dollars.

Economists polled by Reuters had expected a 1-percent rise in inventories after an October increase that was revised downward slightly to 1.7 percent. It was the first fall in wholesale inventories since December 2009.

The stronger-than-expected sales and the fall in inventories implied that demand during the holiday shopping season might have been greater than retailers had anticipated.

As the eurozone's debt issues were still in a bad shape, the European Central Bank decided to buy Portuguese bonds ahead of the country's bond auction on Wednesday, to prevent Portugal from seeking an international bailout.

Also, Japan announced that it planned to buy euro bonds, which helped lift the euro. The euro traded higher against the dollar to 1.2970 in late trading session in New York on Tuesday.

The European shares rose to a near 28-month closing high on Tuesday, despite concerns about the eurozone debt problems.

The pan-European FTSEurofirst 300 index of top shares closed 1. 3 percent higher at 1,147.59 points, ending at its highest closing level since mid-September 2008.

Investors are set to focus on a series of Wednesday's market- affecting matters, including import-export price indexes, oil inventories and most importantly, the Fed's Beige Book.

As of Tuesday's close, the Dow Jones industrial average rose 34. 43 points, or 0.30 percent, to 11,671.88. The Standard & Poor's 500 index increased 4.73 points, or 0.37 percent, to 1,274.48 and the Nasdaq climbed 9.03 points, or 0.33 percent, to 2,716.83.