NEW YORK – Better than expected earnings reports and a lift in the manufacturing sector sent the stock market to two and half year highs Tuesday.
The Dow Jones industrial average crossed 12,000 once again, and the Standard and Poor's 500 stock-index — the benchmark for most U.S. mutual funds — reached 1,300.
Pfizer Inc., United Parcel Service Inc. and agriculture giant Archer Daniels Midland Co. all beat earnings forecasts.
The Institute of Supply Management said Tuesday that manufacturing activity expanded in January at its fastest pace in nearly seven years. Increased spending by businesses and consumers helped push the index higher, the company said.
"This is a good indicator that businesses have come out of the gate strongly in 2011," said Burt White, chief investment officer for LPL Financial. "We are seeing businesses spend again and this is exactly what we needed to see for this economy to move forward."
The better economic data helped push stocks broadly higher. All 10 company groups that make up the S&P index rose. Materials companies rose 2.6 percent, the largest gain of any group.
The Dow Jones industrial average gained 128 points, or 1.1 percent, to 12,020. It last closed above 12,000 in June 2008, although it traded above that level several times last week before settling lower.
The S&P 500 index gained 20 points, or 1.6 percent, to 1,306. It last closed above 1,300 in August 2008.
The Nasdaq composite index rose 51, or 1.9 percent, to 2,751.
Before the market opened, Archer Daniels Midland said that its profit jumped 29 percent last quarter because of growing demand for grains. The agriculture conglomerate easily beat analyst estimates. Its stock jumped 6 percent.
United Parcel Service Inc. said its 2011 earnings will likely top its pre-recession levels from 2007. UPS gained 4 percent.
Pfizer Inc. said its fourth-quarter profit nearly quadrupled and its revenues rose 6 percent. The company narrowly beat analyst estimates and gained 6 percent. That was the best performance among the 30 stocks that make up the Dow index.
McDonald's Corp. was the only stock in the Dow to fall, losing 0.3 percent.
General Motors Co. said that sales of cars and trucks in the U.S. rose 23 percent, well above what analysts had forecast. The company gained 1 percent to $36.82.
Electronic Arts and Boston Scientific are among the companies that will report earnings by the end of the day.
Bond prices fell, sending their yields higher. The yield on the benchmark 10-year Treasury note rose to 3.42 from 3.38 percent late Monday.