US stocks fight back after Monday's big sell off

US stocks climbed, recovering a day after the market's biggest sell-off since November, as stronger-than-expected earnings brightened the profit picture.

Dell Inc's stock rose after the world's No. 3 computer maker agreed to be taken private in a $US24.4 billion ($A23.4 billion) deal, the largest leveraged buyout since the 2008-2009 financial crisis. The stock gained 1.1 per cent to $US13.42.

All 10 S&P sectors were higher, and the S&P 500 and Nasdaq gained more than 1 per cent.

The market's bounce follows a sell-off on Monday that gave the S&P 500 its biggest percentage decline since mid-November. The benchmark remains up 6 per cent since the start of the year and is less than 4 per cent away from its all-time closing high of 1565.15 from October 2007.

Analysts said fourth-quarter results have been among factors helping to boost stocks. On Tuesday, Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 3.3 per cent to $29.38.

"There's not a huge upside surprise by any means, but we're definitely seeing slightly better-than-expected earnings overall," said Bryant Evans, portfolio manager at Cozad Asset Management.


The Dow Jones industrial average was up 99.22 points, or 0.71 per cent, at 13,979.30. The Standard & Poor's 500 Index was up 15.58 points, or 1.04 per cent, at 1511.29. The Nasdaq Composite Index was up 40.41 points, or 1.29 per cent, at 3171.58.

The market shot higher at the start of the year after US lawmakers were able to come to a last-minute agreement to avoid a national "fiscal cliff," but questions on spending cuts remain.

President Barack Obama on Tuesday urged Congress to pass a small package of spending cuts and tax reforms. Though the plan was quickly rebuffed by Republican leaders, investors are looking for an agreement.

"I think there's some hopefulness out there that a reasonable compromise will be made," Mr Evans said.

Also in earnings, Estee Lauder reported a higher quarterly profit and raised its full-year profit forecast. The stock rose 6 per cent to $64.71.

With results in from more than half of the S&P 500 companies, 69 per cent have beaten profit expectations, compared with the 62 per cent average since 1994 and the 65 per cent average over the past four quarters. Sixty-six per cent of companies have beaten on revenue.

Fourth-quarter earnings for S&P 500 companies are expected to rise 4.5 per cent, according to the data, above the 1.9 per cent forecast at the start of earnings season.

On the down side, McGraw-Hill shares slumped 10.7 per cent to $44.92 after the US Justice Department filed a civil lawsuit seeking $5 billion over mortgage bond ratings. Standard & Poor's, a McGraw Hill unit, was accused of inflating ratings and understating risk out of a desire to gain more business from investment banks.

On Monday, McGraw-Hill stock suffered its worst one-day decline since the 1987 market crash.

Volume was roughly 6.7 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 11 to 4 and on the Nasdaq by about 3 to 1.