By Chuck Mikolajczak
NEW YORK (Reuters) - U.S. stocks rallied on Tuesday to rebound from a two-day decline as investors shrugged off another decline in oil prices and shifted attention to corporate earnings season.
Alcoa Inc reported a higher-than-expected quarterly profit due to automotive demand, higher aluminum prices and lower energy costs. The stock climbed as high as $16.52 before paring gains, and was last down 1.6 percent to $15.91.
Gains were broad, with each of the 10 major S&P sectors in positive territory. The S&P technology sector led the advance with a 1.8 percent gain.
The benchmark S&P index has fallen in seven of the prior nine sessions and is down about 1.8 percent from its most recent record high on Dec. 29.
"We have reached a point over the last two weeks where investors are not only eager for earnings season because of its fourth-quarter focus, but they are also eager for the guidance forward which has largely evaporated in this cloud of the oil trade," said Peter Kenny, chief market strategist at Clearpool Group in New York.
The Dow Jones industrial average rose 238.87 points, or 1.35 percent, to 17,879.71, the S&P 500 gained 23.9 points, or 1.18 percent, to 2,052.16 and the Nasdaq Composite added 78.72 points, or 1.69 percent, to 4,743.43.
Financials including JPMorgan Chase & Co, Wells Fargo & Co, Goldman Sachs Group Inc and Citigroup Inc are among the companies due to report this week, along with Dow component Intel Corp.
Fourth-quarter earnings are expected to show growth of 3.7 percent over the year-earlier period, according to Thomson Reuters data, down from the 11.2 percent growth expected on October 1, which may result in more companies topping forecasts.
"Analysts really have knocked their estimates down pretty dramatically over the last three months for this quarter, my sense is companies are going to beat but expectations are as low a limbo stick right now," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
Brent and U.S. crude touched their lowest levels in almost six years as a big OPEC producer stood by the group's decision not to cut output. Brent was last down 3.9 percent at $45.58, while U.S. crude was off 1.4 percent at $45.44.
Goodyear Tire & Rubber stumbled 6 percent to $26.35 after the estimated full-year operating income growth "slightly below" its forecast of 10 to 15 percent.
Advancing issues outnumbered declining ones on the NYSE by 2,270 to 707, for a 3.21-to-1 ratio; on the Nasdaq, 1,930 issues rose and 669 fell for a 2.88-to-1 ratio.
The benchmark S&P 500 was posting 57 new 52-week highs and 11 new lows; the Nasdaq Composite was recording 104 new highs and 33 new lows.
(Reporting by Chuck Mikolajczak; Editing by Lisa Von Ahn and Nick Zieminski)
