S&P rises above 1400 for first time since May

Stocks post another gain as S&P and Nasdaq reach milestones. Dow is now less than 1,000 points from all-time high.

It was a day of milestones for the stock market.

Stronger corporate earnings reports and expectations that central banks will act to support the economy powered the Standard & Poor's 500 index past 1,400 for the first time in three months. The index rose 7.12 points to close at 1,401.35 on Tuesday. Energy stocks increased the most of the 10 industry groups tracked by the index.

The Nasdaq composite index marked a milestone of its own: the first close above 3,000 since early May. The Nasdaq rose 25.95 points to 3,015.86.

The S&P hasn't closed above 1,400 since May 2, and the Nasdaq hasn't closed above 3,000 since May 3.

"There's been a bunch of positive earnings numbers," said Stephen Carl, head of equity trading at The Williams Capital Group. "While that makes some investors happy, I'd like to see some more robust growth."

The Dow Jones industrial average rose 51.09 points to 13,168.60. The Dow is now 996 points below its all-time high of 14,164.53 reached on Oct. 9, 2007, prior to the financial crisis. The Dow would have to rise 7.6 percent to break that record.

Energy companies rose broadly after Chesapeake Energy reported that its income doubled in the second quarter. Revenue from oil, natural gas and natural gas liquids rose. Chesapeake's stock soared $1.67 to $19.37, lifting other energy stocks with it — Cabot Oil & Gas jumped $2.09 to $42.88 and Occidental Petroleum rose $2.48 to $90.74.

Chesapeake was the latest major U.S. company to turn in a stronger earnings report. Of the 430 companies in the S&P 500 that have reported earnings through Tuesday, 65 percent beat Wall Street's expectations, according to S&P Capital IQ. More than 43 percent have reported double-digit growth.

On Tuesday, accessories maker Fossil reported that its second-quarter net income climbed 12 percent thanks to growing demand in Asia and strong watch sales. The performance topped analysts' estimates, and the stockpopped $21.98, or 31.5 percent, to $91.77, the biggest gain in the S&P 500 index.

MGM Resorts International reported a 29 percent surge in revenue even though the casino company had a quarterly loss. The stock rose 70 cents, or 7.5 percent, to $10.08.

Also Tuesday, the Labor Department said U.S. employers posted the most job openings in four years in June, a positive sign that hiring may pick up. Layoffs also fell. The data follow Friday's report that said U.S. employers in July added the most jobs in five months, far more than economists were expecting.

Recent comments by Federal Reserve chairman Ben Bernanke that the slow economic recovery has hurt many Americans has kept hope alive that the Fed will take more steps to kick-start the economy at its next meeting in September.

Investors cut their holdings of safer assets like U.S. Treasurys, sending yields higher, as investors sold them. The yield on the benchmark 10-year Treasury note rose to 1.63 percent from 1.56 late Monday.

In Europe, most markets rose, despite news that Italy's recession deepened in the April through June period. Italy's economy shrank for the fourth quarter in a row. Benchmark stock indexes rose 2.2 percent in both Italy and Spain, and 1.5 percent in France.

Italy's government, which is trying to reduce debt, has made spending cuts and tax increases that are hurting businesses and households. Investors hope that the European Central Bank will help support financial weaker countries like Italy and Spain by buying their government bonds, which will hold down the interest rates these countries must pay to borrow money.