U.S. stocks shot higher Tuesday, extending the recent winning streak to six sessions as better than expected earnings from Alcoa and CSX boosted expectations for upcoming reports from bellwethers like Caterpillar.

The Dow Jones Industrial Average climbed 146.75 points, or 1.44%, to 10363.02. Caterpillar, which reports results July 22, was the measure's best performer, rising 2.51, or 3.9%, to 66.79. Alcoa rose 13 cents, or 1.2%, to 11, after the aluminum giant swung to a second quarter profit.

The company reported a pick up in demand in almost every one of its markets, suggesting a possible improvement in the manufacturing sector.

Intel (Nasdaq) closed up 44 cents, or 2.1%, to 21.01, ahead of its second quarter report.

The chip giant then posted earnings well above analysts' estimates, and raised its outlook for 2010 gross margin to 66% from 64%. The stock rose 4.8% in after hours trading. The Nasdaq Composite rose 43.67, or 1.99%, to 2242.03.

The Standard & Poor's 500 index advanced 16.59, or 1.54%, to 1095.34, with all of its sectors in the black.

The gains came as the report from Intel, as well as results from railroad operator CSX and others, started the second quarter earnings season on a positive note.

CSX's profit jumped 47% on higher revenue due to volume gains across all major markets. However, CSX slid 74 cents, or 1.4%, to 51.72, as the company's chief executive said it has seen some increased in activity in rate challenges.

European shares ended with strong gains Tuesday, rising after Alcoa got the U.S. second quarter earnings season off to a good start, BMW hiked its earnings outlook and a report suggested that new bank capital rules will be less onerous than previously anticipated. The Stoxx Europe 600 index rose 1.9% to finish at 255.99, its sixth consecutive daily rise.

Banks rallied, with Deutsche Bank gaining 2.8%, Credit Agricole rising 3.7% and Barclays gaining 4.2%. Greek banks gained ground after the Greek government Tuesday managed to sell EUR1.625 billion of 26 week bills in its first move into the debt market since tapping a joint European Union International Monetary Fund rescue plan. National Bank of Greece shares rose 4% and the Greek ASE Composite index jumped 2.6% to 1,567.48.

However, Portugal's PSI 20 index rose just 0.1% to 7,312.59, lagging much of the rest of Europe, after Moody's Investor Service downgrading Portugal's bond ratings two notches to A1 from Aa2 earlier in the session.

Of the major regional benchmarks, the U.K. FTSE 100 index rose 2% to close at 5,271.02, the French CAC-40 index rose 2% to settle at 3,637.76 and the German DAX index finished 1.9% higher at 6,191.13.

Asian benchmarks erased early gains Tuesday to end mixed, dragged lower by losses in Chinese shares after Beijing dashed hopes that it would relax its tightening policies on the property market.

The Chinese government denied an unsourced report in the state run Securities Times newspaper Monday that China had loosened some controls on mortgage lending in first tier cities, with three ministries late Monday reiterating their resolve to stick to tight property policy to curb speculation.

China's Shanghai Composite index ended down 1.6%, while Hong Kong's Hang Seng index lost 0.2%. Japan's Nikkei Stock Average ended down 0.1% and Taiwan's Taiex was 0.6% lower. South Korea's Kospi Composite eked out a gain of less than 0.1%.

In China, property developers led declines. China Vanke fell 2.4% and Poly Real Estate Group was down 4.3%.

In Hong Kong, mainland developers slipped with Country Garden down 0.9%, Guangzhou R&F Properties off 1.3% and Agile Property 1.2% lower.

Base metals on the London Metal Exchange closed higher Tuesday, tracking a rally in equities and a weaker dollar, but analysts said lower volumes and macroeconomic concerns are likely to lead to continued volatility in the days ahead.

The metals rebounded after a weak early start Tuesday, caused by sagging Asian stock markets, with tin hitting an intraday high of $18,175 a metric ton its highest level in two weeks.

LME three month copper closed up 1%, with nickel up 1.8%, lead up 2.3% and tin up 2.6% on Monday's kerb close. Crude futures settled higher Tuesday, bouncing off Monday's decline on encouraging economic signals and expectations upcoming data will show U.S. oil inventories have declined.

Light, sweet crude for August delivery settled up $2.20, or 2.9%, at $77.15 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled up $2.28 at $76.65 a barrel.

The dollar also moved sharply lower against the euro, boosting oil prices by making the commodity cheaper to buy using other currencies.

Gold futures rose in a rally with other commodities on improving economic sentiment at the onset of U.S. corporate earnings season.

The most actively traded contract, for August delivery, settled up $14.80, or 1.2%, at $1,213.50 an ounce on the Comex division of the New York Mercantile Exchange.

Provided by Morrison Securities