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Overnight Markets: US stocks rebound on strong corporate earnings

Overnight Markets: US stocks rebound on strong corporate earnings

US stocks bounced back on Tuesday, recovering much of Monday's losses, as stronger-than-expected earnings brightened the profit picture.

The Dow Jones industrial average was up 99 points, or 0.71%, at 13,979. The Standard & Poor's 500 Index was up 16 points, or 1.04%, at 1,511. The Nasdaq Composite Index was up 40 points, or 1.29%, at 3,172.

Shares gained higher after companies unveiled strong earnings yesterday that beat analyst estimates. The gains were also attributed to economic reports showing US services sector activity rising and the contraction in eurozone business activity decelerating.

Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 3.3%.

Estée Lauder Cos Inc reported a higher quarterly profit and raised its full-year profit forecast. The stock rose 6%.

S&P 500 companies are expected to report the fourth-quarter earnings up 4.5%, according to an estimate.

Dell Inc's shares gained 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 1.1%. Dell rival Hewlett-Packard rose 2.5%.

Elsewhere, Apple jumped 3.5% and BlackBerry rose 7.6%.

Among the Dow blue-chip members, the biggest gains came from UnitedHealth Group, up 3.7%, Bank of America, which added 3.4% and JP Morgan Chase, whose shares rose 2.3%.

On the negative side, McGraw-Hill shares lost 10.7% after the US Justice Department filed a civil lawsuit seeking $5 billion over mortgage bond ratings.

Meanwhile, President Barack Obama urged Congress to approve a small package of spending cuts and tax reforms. Republican leaders quickly rejected the plan, but investors are expecting an agreement.

In Asia, shares gained on Wednesday led by Japan’s Nikkei 225 Stock Average as Toyota Motor Corp. increased its profit forecast and the yen weakened, boosting the earnings outlook for exporters.

The MSCI Asia Pacific Index gained 1.1% to 133 as of 12:25 p.m. in Tokyo. Japan’s Nikkei 225 climbed 3.1%, poised for the highest close since September 2008.

Hong Kong’s Hang Seng Index rose 0.4% and China’s Shanghai Composite slipped 0.1%. Australia’s S&P/ASX 200 Index advanced 0.8% even as a report showed the nation’s retail sales unexpectedly fell for a third month in December. South Korea’s Kospi Index and Singapore’s Straits Times Index gained less than 0.1%. Taiwan’s Taiex Index rose 0.5%.

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