YAHOO [BRIEFING.COM]: Stocks rallied sharply in response to a strong batch of earnings reports, pleasing economic data, and presumed progress in talks about raising the U.S. debt ceiling.

A positive tone permeated trade for the entire session. It was first spurred by renewed buying interest among Europe's major bourses after they had suffered another slide in the prior session. Earnings also stoked early buying interest, given that the vast majority of reports exceeded what had been expected.

Dow components Johnson & Johnson (JNJ 66.72, -0.37), Coca-Cola (KO 69.32, +2.20), and IBM (IBM 185.21, +9.93) all posted upside surprises. Shares of JNJ and KO actually climbed to record highs.

Bank of America (BAC 9.57, -0.15) also beat, but the stock had a different reaction -- it extended its descent to a fresh two-year low. Fellow financial giant Goldman Sachs (GS 128.49, -0.84) also dropped to a two-year low after it broke character to post earnings that failed to come anywhere close to the consensus estimate.

Of all things, housing data also offered encouragement to early traders. Housing starts for June reportedly hit an annualized rate of 629,000 units, which is greater than the clip of 570,000 units that had been anticipated, on average, among economists polled by Briefing.com. The annualized clip posted for June was the most robust rate recorded since January. As for building permits, they improved to a rate of 624,000 from 609,000 in the prior month. The consensus had called for permits to remain at a rate of 609,000.

The stock market traded with an impressive gain for most of the session, but the S&P 500 was restricted to a range between near-term support around 1315 and near-term resistance around 1320 until President Obama provided a mid-afternoon update on the debt ceiling dealings. Obama indicated a bipartisan group of Senators has agreed to a plan that features tough spending cuts and a revenue component.

The stock market responded by extending its advance beyond the upper boundary of its morning range. Buying was broad, but tech stocks offered the most leadership. The sector ascended to a 2.7% gain. Apple (AAPL 376.85, +3.05) was actually a relative laggard ahead of its quarterly report.

Treasuries also responded positively to Obama's update. In turn, the yield on the benchmark 10-year Note dropped back below 2.90%.

As for the dollar, it ended the day with a 0.3% loss against competing currencies. That's about half of what it had endured during the early going.

August gold, which settled lower by 0.3% to $1597.40 per ounce, and Sept silver, which finished down 0.7% to $40.65 per ounce, spent most of the session chopping around the flat line. However, in the last ~30 min of pit trade, news of a "Gang of Six" debt plan, coupled with a quickly announced press conference for the President on the debt talks, sent both metals sharply lower as the markets anticipated progress being made in the negotiations. Both metals have extended their respective sell-offs in afterhours trade and have recently traded to fresh lows, at $1585.60 for gold and $39.12 for silver.

August crude oil settled higher by 1.6% to $97.50 per barrel. Futures were able to recoup yesterday's losses, aided by better-than-expected econ data, as well as the anticipated progress being made in the debt negotiations. It was an uneventful session for August natural gas, which finished lower by 0.4% to $4.53 per MMBtu

Advancing Sectors: Tech +2.7%, Consumer Discretionary +2.0%, Energy +1.7%, Consumer Staples +1.5%, Financials +1.4%, Materials +1.4%, Industrials +1.3%, Health Care +0.9%, Telecom +0.8%, Utilities +0.8%
Declining Sectors: (None)DJ30 +202.26 NASDAQ +61.41 NQ100 +2.3% R2K +2.3% SP400 +2.0% SP500 +21.29 NASDAQ Adv/Vol/Dec 2036/1.90 bln/548 NYSE Adv/Vol/Dec 2417/870 mln/632