Stocks Ended Up with Europe in View

U.S. stocks Tuesday ended higher for the second session as investors took comfort from a relatively low volume of negative headlines about Europe. The Dow Jones Industrial Average was up 44.73 points, or 0.40%, at 11,105.85 at the close of floor trading. The S&P 500 gained 10.60 points, or 0.91%, to 1,172.87. The Nasdaq Composite rose 37.06 points, or 1.49%, to 2,532.15.

German Chancellor Angela Merkel sought Tuesday to calm market fears that Greece is heading for a chaotic default as Europe struggles to contain a crippling financial crisis. Merkel rejected the notion that a Greek bankruptcy would provide a quick solution to the eurozone debt crisis. She argued that Europe instead needs to stick to its efforts to cut budget deficits and improve its competitiveness, and that resolving the crisis would be “a very long, step-by-step process.”

The federal budget deficit reached $1.23 trillion in August. The third straight $1 trillion-plus deficit adds pressure on Congress and the White House to reach agreement on a long-term plan to trim government spending. The Treasury Department said the deficit grew by $134.2 billion last month. At that rate, the nonpartisan Congressional Budget Office projects the deficit will total $1.28 trillion when the budget year ends in September.

Cisco Systems Inc. lowered its long-term sales forecast on Tuesday. Chief Financial Officer Frank Calderoni told analysts and investors at a meeting in San Jose, Calif. that Cisco now expects sales to grow 5 percent to 7 percent per year for the next three years. Its long-term target has been for annual revenue growth of 12 percent to 17 percent.

Dell Inc. on Tuesday said its board of directors authorized and additional $5 billion for stock repurchases. The authorization is in addition to $2.16 billion remaining from previous earmarks Dell made to buy back its shares.

Best Buy posted second-quarter profit that plunged 30 percent, sales that missed Wall Street estimates and the company lowered its forecast for the year.

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