NEW YORK (AP) — Banks and homebuilders pulled the stock market higher Tuesday, overriding early jitters about a potential stalemate in efforts to stem the European debt crisis.
Bank of America Corp. rose 8 percent in afternoon trading after it beat earnings expectations for the third quarter thanks to accounting gains and the sale of a stake in a Chinese bank. Goldman Sachs rose 4 percent, even after reporting just its second quarterly loss since going public in 1999.
The Dow Jones industrial average was up 125 points, or 1 percent, to 11,521 at 2:30 p.m. Eastern. International Business Machines tugged on the Dow average, falling 4 percent, the most of any Dow stock by far. IBM reported quarterly revenues that fell short of Wall Street estimates.
There was also better news from the housing market, which has rattled banks since the real estate collapse.
A survey of U.S. homebuilders showed they are less pessimistic about the struggling market. The National Association of Home Builders said its index of builder sentiment rose from 14 to 18 this month, the highest level since May 2010. But any reading below 50 reflects overall pessimism.
Building company stocks jumped on the news. D. R. Horton Inc. and PulteGroup Inc. soared 11 percent. Lennar Corp. jumped 9 percent.
The Standard & Poor’s 500 index rose 16, or 1.4 percent, to 1,217. The Nasdaq composite rose 23, or 0.8 percent, to 2,638.
Markets wavered in early morning trading after some disappointing corporate earnings reports and concerns that France and Germany may not reach an agreement on additional support for Greece.
The ratings agency Moody’s also said late Monday that the stable outlook for France’s top-notch credit rating is under pressure. On Tuesday, that country’s finance minister said that the economy will likely grow a rate of less than 1.5 percent next year. France is Europe’s second-largest economy.
Investors were troubled by reports that France and Germany remain divided on a plan to provide more support for Greece. An agreement between the two countries is seen as the bedrock for a rescue package that can pass all 17 countries that share the euro.
The Greek government is widely expected to go through some kind of default or restructuring of its debt. If that process becomes disorderly, European banks could suffer big losses on Greek government bonds and that could spread overseas, jolting global credit markets.
Tuesday brought full day of corporate earnings reports in the U.S.
UnitedHealth Group Inc. fell 5 percent after its third-quarter profit dipped. The country’s largest health insurer by sales said medical costs climbed and more patients visited their doctors’ office.
Coca-Cola Co. lost half of 1 percent after narrowly beating Wall Street’s earnings estimates. Johnson & Johnson rose half of 1 percent after posting a 6 percent in decline in third-quarter profit, roughly in line with analyst expectations.
Apple Inc. and Intel Corp. will report their results from the last quarter after the market closes.