US STOCKS-Banks, commodity stocks lift S&P 500 to 5-year high

Rodrigo Campos
Reuters Middle East

* Blue chips: Travelers up after results, J&J slips

* RIM shares rally on possible strategic alliances

* Google, IBM shares rise after the bell

* Dow up 0.5 pct, S&P 500 up 0.4 pct, Nasdaq up 0.3 pct

NEW YORK, Jan 22 (Reuters) - Bank and commodity shares led

the Standard & Poor's 500 to a fresh five-year closing high on

Tuesday on hopes that the global economy continues to mend.

The Dow Jones industrial average also ended at a five-year

high, buoyed by an advance in Travelers' shares after the

insurer's earnings.

The market also gained on signals that Republican leaders in

the U.S. House of Representatives aim on Wednesday to pass a

nearly four-month extension of the U.S. debt limit. The White

House welcomed the move, saying it defuses fears of a U.S.

default on its debt.

Investors, however, were cautious ahead of an increase in

earnings reports and as the S&P 500 rose for a fifth straight


Jack de Gan, chief investment officer of Harbor Advisory

Corp, in Portsmouth, New Hampshire, said better economic numbers

in the United States and China, as well as more stabilization in

Europe, were driving buyers into sectors associated with

economic growth.

"Any (bearish) news could turn us down for a day or so," he

said, referring to the recent string of gains.

Freeport-McMoRan Copper & Gold led gains in the

materials sector after it reported a 16 percent rise in

fourth-quarter profit on higher production. Shares gained 4.6

percent to $35.19.

The Dow Jones industrial average rose 62.51 points,

or 0.46 percent, to 13,712.21 at the close. The S&P 500

gained 6.58 points, or 0.44 percent, to 1,492.56. The Nasdaq

Composite added 8.47 points or 0.27 percent, to


Signs of improved sentiment toward world growth were seen in

European bond markets. The yield on Portugal's benchmark 10-year

note fell below 6 percent for the first time since late 2010 on

news that the country was set to tap the bond market this week

for the first time since it was bailed out in 2011.

Technology shares underperformed as concerns about Apple's

ability to continue to grow at hyper speed and a weak

outlook from Intel Corp diminished optimism about the

sector's prospects. The S&P technology index added

0.16 percent, compared with 0.9 percent gains in energy,

financials and basic materials.

In extended-hours trading, Google shares rose 4.5

percent to above $734 after the world's No. 1 search engine

reported a jump in fourth-quarter revenue, while IBM

added more than 3 percent to trade above $200 after the world's

largest technology services company reported earnings and

revenue that beat estimates.

During the regular session, shares of blue chips Travelers

, DuPont, and Verizon Communications rose

following earnings

Travelers rose 2.2 percent to $77.95, a closing high.

DuPont's shares gained 1.8 percent to $47.82 and Verizon's stock

rose 0.9 percent to $42.94.

Thomson Reuters data through Tuesday morning showed that of

the 74 S&P 500 companies that have reported earnings so far,

62.2 percent have topped expectations, roughly even with the 62

percent average since 1994, but below the 65 percent average

over the past four quarters.

Overall, S&P 500 fourth-quarter earnings are forecast to

have risen 2.6 percent. That estimate is above the 1.9 percent

forecast from the start of earnings season, but well below the

9.9 percent fourth-quarter earnings forecast from Oct. 1, the

data showed.

U.S.-listed shares of Research in Motion

rallied 13 percent to $17.90 a day after its chief executive

said the Canadian company may consider strategic alliances with

other companies after the launch of devices powered by RIM's new

BlackBerry 10 operating system.

About 6.2 billion shares changed hands on the New York Stock

Exchange, the Nasdaq and NYSE MKT, below last year's daily

average of about 6.45 billion shares.

On the NYSE, advancers outnumbered decliners by a ratio of

roughly 7 to 3. On the Nasdaq, five stocks rose for every three

that fell.