NEW YORK (AP) - Strong profits and a bipartisan plan to lift the U.S. debt limit drove a stock market rebound on Tuesday.
Stock indexes rose after Coca-Cola, IBM and other companies reported rising second-quarter earnings. The three major indexes added to their gains after President Barack Obama praised a proposal by six senators that would cut debt by $3.7 trillion over the next decade and raise the country's $14.3 trillion debt ceiling.
The Dow Jones industrial average gained 194 points, or 1.6 percent, to 12,580 in afternoon trading, reversing its 95-point slump from Monday.
The S&P 500 index rose 19 points or 1.5 percent, to 1,325. The Nasdaq composite gained 54 points or 2 percent, to 2,819.
"It looks like there's bipartisan support for a robust plan," said Burt White, chief investment officer at LPL Financial in Boston. "The stock market had been looking for a reason to have a relief rally. And it looks like they got the start of one today. "
The ongoing deadlock in Washington over raising the country's borrowing limit and Europe's debt crisis have been weighing on markets this month. The Dow slid five of the previous seven days.
Tuesday's gains pushed the three major indexes higher for the month.
Information technology stocks led industry groups higher after IBM Corp.'s results beat analysts' estimates. Corporate software spending held steady during the quarter. IBM's stock rose more than 4 percent.
Coca-Cola Co.'s income rose 18 percent in the second quarter on stronger sales overseas. The world's largest beverage maker raised some prices to offset higher ingredient costs. Coca-Cola's stock was up more than 3 percent.