Wall Street rises as Coke, Goldman earnings beat

NEW YORK (Reuters) - Stocks rose on Tuesday after Coca Cola and Goldman Sachs were the latest companies to post stronger-than-expected earnings and as Federal Reserve Chairman Ben Bernanke left the door open to more stimulus.

Indications are not pointing to a collapse in earnings as some had feared. So far, more than 77 percent of companies have beat estimates, albeit from a significantly lowered bar.

Goldman Sachs shares rose above $100 but last traded up 0.3 percent at $98.06 even as its quarterly profit fell 12 percent. Coca-Cola Co , which also topped consensus forecasts, rose 1.9 percent to $77.93.

Frustration over Bernanke's lack of specifics about stimulative quantitative easing measures, or QE3, in testimony before a Senate committee drove equities lower early in the trading session.

But the Fed chief said policymakers would consider a range of tools to further stimulate growth if it became clear the labor market was not improving or if deflation risks mounted.

"We do expect the Fed to launch QE3 possibly by as early as August," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York. "The only game in town to revive or raise GDP growth is the Fed."

The Dow Jones industrial average <.DJI> rose 82.61 points, or 0.65 percent, at 12,809.82. The Standard & Poor's 500 Index <.SPX> added 9.53 points, or 0.70 percent, at 1,363.17. The Nasdaq Composite Index <.IXIC> climbed 15.54 points, or 0.54 percent, at 2,912.48.

"If the economy is weakening it means (Bernanke) will probably come back to the table. He hasn't spent that bullet yet and until he does, the markets are probably going to hold up," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.

"From a technical side we see improvement in the trend in the market, but the leadership remains with defensive sectors, which tells us there's not a lot of appetite for risk."

In the last month, most gains on the S&P have come from the telecommunications services, consumer staples and healthcare sectors, which are considered defensive, safer plays. Industrials, technology and materials have posted losses in that period.

The basic materials sector was among gainers on the S&P 500 on Tuesday, with a 6 percent jump in shares of fertilizer company Mosaic after it reported better-than-expected quarterly results.

The S&P has posted losses in seven of the last nine sessions, falling about 1 percent.

The relatively slight losses amid a worsening economic picture has been credited in part to historic low bond yields and to a vigilant Fed.

Shares of State Street Corp fell 6.4 percent to $41.31 after the company said second-quarter net income fell.

Johnson & Johnson cut its full-year profit forecast. Shares traded lower in the morning but later turned up 1 percent at $68.94.

Excitement around Yahoo Inc's new chief executive, Marissa Mayer, formerly a top executive at Google , faded and Yahoo shares slipped 0.3 percent at $15.60 after a 2 percent rise. Yahoo has cycled through three CEOs in a year.

(Additional reporting by Rodrigo Campos, editing by Kenneth Barry)