Stocks move higher amid more solid earnings

Stocks ended a volatile session Tuesday with another gain on better-than-expected earnings despite fresh worries about regional banks and a mixed outlook from Federal Reserve Chairman Ben S. Bernanke.

The Dow Jones industrial average climbed 68 points for its seventh straight advance.

Bernanke reiterated the Fed’s view that the economy was still on track to return to growth mode this year, but said that growth would be slow and that the jobless rate would peak at the end of 2009 but remain high for some time.

Heavy-equipment maker Caterpillar joined other major companies in issuing an improved 2009 profit forecast. The global economic bellwether’s second-quarter profit fell 66% but still topped expectations. Caterpillar shares shot up 7.7%.

Bank stocks stumbled after Regions Financial, Comerica and Zions Bancorp posted second-quarter losses that stirred worries about rising loan defaults, a persistent concern for banks as unemployment approaches 10%.

Technology shares could drive the market today. In after-hours trading, chip maker Advanced Micro Devices tumbled as much as 12% after posting a wider-than-expected loss after the bell, while Apple rose 4% after reporting a 15% jump in third-quarter profit.

Tech stocks have led the market’s rally from 12-year lows in early March. The Nasdaq composite index is up 22% for the year, compared with 5.7% for the Standard & Poor’s 500 index and 1.6% for the Dow.

On Tuesday the Dow jumped 67.79 points, or 0.8%, to 8,915.94, its highest level since January. Seven straight advances have pushed the blue-chip gauge up 9.4%. The 30-stock average turned positive for the year Monday with a 104-point gain for the day.

The S&P; 500 index rose 3.45 points, or 0.4%, to 954.58, its highest close since November.

The Nasdaq rose 6.91 points, or 0.4%, to 1,916.20, marking its 10th straight gain. The last time the index rose 10 straight days was in July 1997.

The Russell 2,000 index of smaller companies fell 0.3%.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange.

Drug maker Merck also reported results that beat Wall Street’s expectations, sending healthcare stocks up broadly. Merck shares surged 6%.

Stocks have been rising because company forecasts are signaling that the worst for the economy could be over, according to Mike Binger, portfolio manager at Thrivent Investment Management.

Among financial companies, Regions fell 15%, Zions sank 13% and Comerica slipped 10%.

Yields on government bonds fell on Bernanke’s message that the Fed would keep interest rates low for the time being but also would keep inflation at bay. The benchmark 10-year T-note fell to 3.47% from 3.58% late Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Oil futures rose 74 cents to settle at $64.72 a barrel in New York trading.