Stocks extend rally after strong earnings, outlook from DuPont, European banks

Stocks continue climb on strong earnings

NEW YORK — Stocks extended their rally into a fourth day on Tuesday as economic and earnings reports lifted investors’ optimism about the global recovery.

Chemical maker DuPont Co. easily beat second-quarter profit and revenue forecasts and raised its outlook for the year. DuPont joined a growing number of companies whose results have convinced investors that the economy might not be slowing as much as investors thought.

News on the housing market was mildly upbeat. The S&P/Case-Shiller 20-city home price index for May rose 1.3 percent from April. The homebuyer’s tax credit that expired April 30 had an impact on the reading, and the report warned that the recent gains in home prices are not likely to last.

Some major European banks, including UBS AG and Deutsche Bank AG, reported strong earnings. The results came a few days after regulators evaluated banks across the continent to see which would be likely to survive another economic downturn. Major European indexes rose following the earnings and another positive report on Germany’s economy.

BP, contending with the aftermath of the Gulf of Mexico oil spill, is replacing its CEO, Tony Hayward, with American Robert Dudley. The British oil company reported a record quarterly loss and set aside $32.2 billion to cover the costs of the spill.

The euro briefly rose above $1.30 during morning trading before falling back to $1.2986. It was below $1.20 in early June when investors were more concerned with the health of Europe’s economy.

Stocks fell worldwide in May and June because of worries that mounting government debt across Europe would stall a global recovery. Strong earnings from U.S. and European companies over the past two weeks have helped to ease those concerns.

A report on July consumer confidence due out later Tuesday could temper the upbeat mood in the market. The Conference Board report is expected to show its consumer confidence index dipped again in July, falling to 51.0 from 52.9, according to economists polled by Thomson Reuters. Last month, the index posted its largest drop since February, which helped push stocks sharply lower. If it meets or surpasses the forecast, it might give stocks a further lift.

Consumer confidence has waned in recent months primarily because of ongoing concern about high unemployment. With consumers not as confident as they were just a few months ago, their spending has slowed. Consumer spending accounts for a large portion of the nation’s economy.

In early morning trading, the Dow Jones industrial average rose 32.09, or 0.3 percent, to 10,557.98. The Standard & Poor’s 500 index rose 4.65, or 0.4 percent, to 1,119.66, while the Nasdaq composite index rose 8.95, or 0.4 percent, to 2,305.38.