Wall Street bounces back, Dow briefly passes 14,000

US stocks rose on Tuesday, with the Dow rising above 14,000, as earnings came in stronger than expected and investors sought bargains a day after the market's biggest drop since November.

Dell Inc's stock rose after the world's No. 3 computer maker agreed to be taken private in a $24.4 billion deal, the largest leveraged buyout since the 2008-2009 financial crisis. The stock gained 0.8 per cent to $13.39 after a delayed open.

Major stock indexes fell about 1 per cent in Monday's sell-off, pressured by renewed worries over the euro zone's sovereign debt crisis. Still, equities have been strong performers recently, with the benchmark S&P 500 index up about 5 per cent for 2013.

Wall Street has advanced on strong fourth-quarter earnings and signs of improved economic growth, suggesting the market's longer-term trend remains higher.

"Yesterday was the first real down day of the year, which shows that we are in this strong bull market. Today we are back to the normal pattern. People are realizing that we've overreacted to Europe yesterday," said Uri Landesman, president of Platinum Partners in New York.

"Money in the euro, euro bonds and euro stocks are coming back to the good, old US stock market and 1,545 (on the S&P 500) is the short-term target, probably in the first half of the year," he added.

The Dow Jones industrial average was up 110.50 points, or 0.80 per cent, at 13,990.58 after rising as high as 14,006. The Standard & Poor's 500 Index was up 13.42 points, or 0.90 per cent, at 1,509.13. The Nasdaq Composite Index was up 30.96 points, or 0.99 per cent, at 3,162.13.

Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 3.4 per cent to $29.40.

Estee Lauder Cos Inc reported a higher quarterly profit on Tuesday and raised its full-year profit forecast. The stock rose to a new 52-week high of $66.07 earlier but traded at around $64 in afternoon.

According to Thomson Reuters data, of the 53 per cent of S&P 500 companies that have reported earnings thus far, 69 per cent have beaten profit expectations, over the 62 per cent average since 1994 and the 65 per cent average over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are expected to rise 4.5 per cent, according to the data, above the 1.9 per cent forecast at the start of earnings season but well below the 9.9 per cent forecast on October 1.

The S&P is less than 5 per cent away from its all-time intraday high of 1,576.09, reached in October 2011.

McGraw-Hill slumped 5.4 per cent to $47.55 after the Justice Department filed a civil lawsuit against it seeking $5 billion over mortgage bond ratings. Standard & Poor's, a McGraw Hill unit, was accused of inflated ratings and understated risks out of a desire to gain more business from investment banks.

The stock has dropped more than 20 per cent over the past two days.

US shares of BP Plc rose 1.1 per cent to $44.07 after the company reported earnings that beat expectations and said underlying financial momentum would be "strongly evident" by 2014.

The Institute for Supply Management's non-manufacturing index was 55.2 in January, as expected and down slightly from the previous month.

Copyright @ Thomson Reuters 2013