NEW YORK—U.S. stocks trended higher on Tuesday after European markets rallied earlier in the day, as investors anticipate a solid fourth-quarter earnings season.
The Dow Jones Industrial Average gained 69 points, or 0.6 percent. The broader S&P 500 Index increased 11 points, or 0.9 percent. The Nasdaq Composite Index finished higher by 26 points, or 1 percent.
Pittsburgh-based aluminum producer Alcoa Inc. unofficially kicked off earnings season Monday night with results in line with analysts’ expectations and revenues far exceeding them. In addition, Alcoa predicted a growth in demand for 2012, signaling more business expansion.
Shares in Europe shot up Tuesday as credit ratings agency Fitch Ratings said that it would maintain France’s long-term credit rating. A downgrade to the EU’s second biggest economy would have destabilized the region’s debt markets. After the news, main indices in London, Frankfurt, and Paris were in positive territory. The euro currency also rose for a second day in a row.
Crude oil prices also gained on economic optimism in the United States, although a political standoff with Iran has also helped drive up oil prices. Brent crude for February delivery closed 83 cents higher to $113.28 per barrel, while Texas crude gained 93 cents to settle at $102.24 per barrel on Tuesday.
Foodmaker Could File Bankruptcy
Hostess Brands Inc., a major national bakery company, could file for Chapter 11 bankruptcy protection this week, according to a report in the Wall Street Journal citing insider sources.
Hostess makes the popular Wonder Bread brand of breads and Twinkies snacks. The Irving, Texas-based Hostess has obtained a $75 million debtor-in-possession loan for operations during bankruptcy proceedings.
Kodak Restructures
Imaging giant Eastman Kodak Co. announced another business restructuring on Tuesday following reports that it may also file for bankruptcy this week. Kodak’s shares jumped 45 percent following the news.
The company will create a new division focused on digital consumer goods, and simplify three business lines into two in a move, which Kodak said would streamline operations and cut costs.
The restructure is designed to accelerate the company’s transformation into a digital age leader. “This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak,” said Chief Executive Officer Antonio Perez in a statement.
The 132-year-old company invented digital photography however was late to capitalize on the technology. It has not reported an annual profit since 2007.
