Dow’s String of Losses Ends

Stocks rallied on better-than-expected earnings Tuesday, with the Dow Jones industrial average snapping a four-session losing streak. Today’s trading outlook was brightened when Intel reported strong earnings after the closing bell.

Earnings from Coca-Cola and Texas Instruments topped analyst estimates, putting investors in a buying mood. Wall Street got more good news when the Labor Department’s producer price index, a measure of wholesale prices excluding food and energy, rose by only half of what economists expected. That soothed worries about more aggressive interest rate increases ahead from the Federal Reserve.

“We’re finally seeing some numbers that point to less inflation in the pipeline,” said Lincoln Anderson, chief investment officer at LPL Financial Services. “Coupled with a pretty strong earnings outlook for the quarter, this hopefully puts a floor on the market and gets things turned around again. The fundamentals of the economy remain good.”

The Dow Jones industrial average rose 56.16 points, or 0.56%, to 10,127.41, coming off of four straight down sessions and a loss of 436 points.

Broader stock indicators, which broke their losing streak Monday, continued to gain ground. The Standard & Poor’s 500 index was up 6.80 points, or 0.59%, at 1,152.78. The Nasdaq composite index gained 19.44 points, or 1.02%, to 1,932.36.

Advancing issues outnumbered decliners by about 5 to 2 on the New York Stock Exchange.

Worries about U.S. oil-refining capacity pushed crude futures sharply higher, keeping stock gains somewhat in check. A barrel of light crude settled at $52.29, up $1.92, in New York trading.

The lack of a major sell-off as crude futures climbed nearly $2 a barrel showed that Wall Street may no longer be concerned about the inflationary effects of oil. And analysts said the PPI report may be showing a clear end to the market’s inflation worries -- as long as today’s consumer price index, measuring retail prices, also comes in better than expected.

“I believe oil is disinflationary, just because when you spend more on gasoline, you spend less on other things,” said John Lynch, chief market analyst at Evergreen Investments. “More importantly, wage growth is moderate, so demand is kept in check. And with demand low, you can’t raise prices or trigger inflation.”

The bond market surged after the PPI report, with the yield on the 10-year Treasury note falling to 4.21%, from 4.28% on Monday. Bond yields fall as their prices rise.

The Fed’s steady interest rate increases, designed to shore up the dollar and combat inflation, may be starting to take their toll on the booming housing market. New housing construction tumbled 17.6% in March, according to the Commerce Department, far more than the 4.8% drop Wall Street expected. Part of the drop could be attributed to the weather, but rising rates, which have been slow to creep into long-term debt such as mortgages, was considered a much larger factor.

In other market highlights:

* Computer chip maker Intel said it had a first-quarter profit of 34 cents a share, beating the 31-cent average estimate of analysts polled by Thomson First Call. Intel rose 42 cents to $22.63 in regular trading and extended its gains to $23.45 after hours.

* Coca-Cola added $1.43 to $42.40. The 3.5% gain was the biggest in the Dow average. First-quarter profit excluding some items was 47 cents a share on revenue of $5.27 billion, the company said. Analysts were expecting 43 cents and sales of $5.17 billion.

* Texas Instruments, whose processors run more than half the mobile phones sold last year, jumped $1.25 to $24.17. Quarterly net income increased to 24 cents a share, a penny more than analysts expected. EMC, the world’s biggest maker of data storage computers and software, rose $1.52 to $12.99 after first-quarter net income almost doubled.

The earnings from Texas Instruments and EMC helped allay concerns of a technology spending slowdown, which had been triggered by IBM’s disappointing quarterly results last week. IBM declined $1.17 to $75.48.

* ADC Telecommunications and Lucent Technologies had some of the biggest gains in the S&P; 500 after the makers of telecommunications equipment reported better-than-expected results. ADC surged 32 cents to $2.25, while Lucent added 25 cents to $2.61.

* Merrill Lynch added 80 cents to $54.04, after reporting first-quarter profit of $1.21 a share, beating the $1.18 Thomson estimate. State Street, which provides investment services to institutions, rose $3.49 to $44.68 after reporting earnings of 67 cents a share, beating the 63-cent average analyst estimate.

* Automaker General Motors lost 10 cents to $26.09 after posting a $1.1-billion quarterly loss.