Ahmed Elbatrawy

Stocks rally at the open

NEW YORK (CNN Money) — U.S. stocks opened sharply higher Tuesday, as worries about Europe ease and the latest housing data signaled more building is in the works.

Investors also get the latest round of earnings to parse through, with Goldman Sachs reporting before the bell and a trio of big tech firms on tap after the close.

The Dow Jones industrial average (INDU) added 120 points, or 0.9%. The SP 500 (SPX) gained 10 points, or 0.7%. The Nasdaq (COMP) moved 17 points higher, or 0.6%.

Shares of Apple (AAPL, Fortune 500), which have helped lift broader markets, will remain in focus after shedding nearly 9% over the past five days. Apple shares were slightly down in early trading.

Before the opening bell, banking giant Goldman Sachs (GS, Fortune 500) reported a quarterly profit of $2.1 billion on $9.95 billion in revenue. Goldman also boosted its quarterly dividend by 31% to 46 cents a share.

Worries about Europe eased slightly after the latest edition of an index based on German investor sentiment came in unexpectedly high. An auction of Spanish 12- and 18-month treasury bills also drew strong demand, said Markus Huber, a senior trader with TX Capital in the United Kingdom.

“It brings a bit of relief after the recent auctions have been rather worrying,” he said.

However, investors remain nervous about Spain, where bond yields rose above 6% Monday — the highest level in several months. The Spanish government, which will auction bonds later this week, has been struggling with rising borrowing costs amid fears that it may need to be bailed out.

Spanish 10-year yields eased to 5.89% on Tuesday morning. On Thursday, the country will hold a closely watched auction of 10-year bonds.

“Thursday’s going to be the key — the debt auction in Spain and how things will progress,” Huber said.

U.S. stocks closed mixed Monday, with blue-chips gaining and tech shares falling.

World markets: European stocks were higher in midday trading. Britain’s FTSE 100 (UKX) added 0.7%, the DAX (DAX) in Germany rose 1.1% and France’s CAC 40 (CAC40) climbed 1.5%.

Asian markets ended lower. The Shanghai Composite (SHCOMP) fell 0.9%, while the Hang Seng (HSI) in Hong Kong shed 0.2% and Japan’s Nikkei (N225) ended slightly lower.

In India, the central bank surprised observers on Tuesday by cutting interest rates by 0.5%, an attempt to ward off a slowdown in the world’s second-most populous country.

Economy: Before the opening bell, the Commerce Department reported that March housing starts occurred at a seasonally adjusted annual rate of 654,000, below expectations and down from February’s rate of 694,000.

March applications for building permits, an indication of future construction activity, came in at an annual rate of 747,000, ahead of expectations and up from February’s rate of 715,000.

Companies: Johnson Johnson (JNJ, Fortune 500) and Coca-Cola (COKE) also released their first-quarter results ahead of the opening bell.

Johnson Johnson posted quarterly earnings of $1.37 a share excluding certain charges, slightly better than forecasts, sending shares up slightly.

Shares of Coca-Cola rose after the company reported earnings of 89 cents a share, in line with expectations, on $11.1 billion in revenue.

U.S. Bancorp (USB, Fortune 500) shares edged higher after the financial firm reported earnings and revenue that beat expectations.

Shares of renewable energy firm First Solar (FSLR) climbed, after the company announced it was reducing its global workforce by 30%.

Chesapeake Energy Corp (CHK, Fortune 500) announced Monday that its oil field services unit plans to go public as a separate company.

After the close, investors will get the latest numbers from Yahoo (YHOO, Fortune 500), IBM (IBM, Fortune 500) and Intel (INTC, Fortune 500).

Yahoo is expected to announce earnings of 17 cents per share, while IBM is expected to post earnings of $2.65 per share.

Currencies and commodities: The dollar fell against the British pound, but gained against the euro and the Japanese yen.

Oil for May delivery rose $1.90 to $104.83 a barrel.

Gold futures for April delivery rose $4.30 to $1,654.00 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.01% from 1.97% late Monday.  To top of page

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Ahmed Elbatrawy