Ahead of bellwether Intel’s results U.S. stocks recorded slim gains Tuesday as optimism about corporate earnings was offset by Alcoa’s disappointing quarterly profit.  Stocks traded in the red in early going, hurt by Alcoa’s poor kickoff to earnings season, but expectations that Intel’s numbers would show the economic recovery is on track helped markets tack on some gains.

And after the closing bell, Intel posted robust numbers.  The giant chipmaker’s first quarter profit almost quadrupled from a year ago and indicated businesses were beginning to open up their coffers for tech-related spending.  That was a welcome sign for the tech sector and shares in fellow chipmakers Advance Micro Devices (NYSE:AMD) and Nvidia (NASDAQ:NVDA) were up in the afterhours trading.

The Dow Jones industrial average advanced 13 points, or 0.1%, to close at 11,019.42, its highest close in more than 18 months.  The S&P 500 index ended the session little changed, still managing to close at a fresh 18-month high, but below the psychologically important 1200.  The Nasdaq composite added 8 points, or 0.3%, ending at a new 22-month high.  On the New York Stock Exchange advancing share were narrowly ahead of declining issues on volume of 1.056 billion shares.

Asia shares gained today on expectations of strong report on China GDP, estimated up 11.7% versus the fourth quarter’s 10.7% rate, as well as today’s news that Moody’s (NYSE:MCO) had raised South Korea’s credit rating and Singapore had lifted its growth projection.

Today’s session could witness an equity rally after better-than-expected first-quarter results from Intel (NASDAQ:INTC) and recovery-indicator CSX (NYSE:CSX).  This morning’s release of JP Morgan’s (NYSE:JPM) blowout earnings have further fueled hopes for a strong economic recovery in works as the company reported quarterly earnings of 74 cents a share, well above Zacks projections of 63 cents a share.  The report kicks off banking sector results, which are expected to have surged 205% y/y, the highest among sectors.

Alcoa’s 1.6% slide was most notable among Dow components, with JP Morgan and UBS (NYSE:UBS) analysts’ negative comments adding to the stock’s weakness.  However, declining oil prices intensified hopes for increased consumer spending and sent shares in Home Depot (NYSE:HD) up 2.6%.  Intel’s shares jumped 1% in anticipations of strong quarterly profit, with General Electric (NYSE:GE) shares up 1.3% ahead of its Friday earnings report

Oil prices meanwhile continued their slide.  The May crude contract fell for the fifth consecutive session, off 29 cents to $84.05, on concerns of oversupply amid rising inventories, even as the International Energy Agency raised its global oil forecast for 2010 by 30,000 bpd. 

Fed Chairman Bernanke’s 10:00 AM testimony in Washington will be closely observed for any shift in accommodative policy intentions.

Zacks Investment Research