Blue chip stocks scored their second serious gain in a row today as traders responded favorably to corporate profits reports and news that General Motors and its principal union have agreed to cut health care costs.
The Dow Jones industrial average closed 61 points higher at 10,348.10 as GM's battered stock staged a comeback, gaining more than $2 a share.
The Standard & Poor's 500 stock index gained almost 4 points to 1,190.10 and the Nasdaq Stock Market composite index picked up 5 points, closing at 2,070.30.
Along with cutting a deal with the United Auto Workers that could save as much as $1 billion a year in health care and retirement costs, GM also is talking about selling its highly profitable financing arm, General Motors Acceptance Corp.
With cash from the GMAC sales and cuts in health care costs, GM should be able to weather the troubles of the auto industry, analysts proclaimed today.
Another blue chip winner today was Altria Group, the parent of Philip Morris tobacco, which benefited from a Supreme Court decision on government litigation against the tobacco industry.
Those two stocks helped pull the whole market higher in late trading.
Dozens of other well known companies will report their third quarter earnings this week and most are projected to meet or exceed analysts' expectations. If they deliver, trend watchers say, the market could score major gains by Friday.