Wall St. rises on Greek deal hopes even as energy drops

NEW YORK (Reuters) - U.S. stocks rose on Tuesday on hopes a deal in Greek debt negotiations was drawing closer and on Coca-Cola earnings, but a drop in energy shares helped cap the advance.

The European Commission will introduce a compromise proposal in which Greece should ask for a six-month period to discuss with lenders any pending issues and post-bailout plan according to a report by MNSI, citing unnamed sources.

The Commission said there was no formal proposal for resolving Greece's debt problems, although talks were intensive ahead of a series of meetings of euro zone finance ministers and EU leaders in Brussels.

"Clearly the market thinks some resolution's going to come out of this that's going to make bond holders not suffer the consequences, and that's why the market is up," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The first drop in oil prices in four sessions weighed on the S&P energy <.SPNY> index, sending it down 0.7 percent, the only one of 10 S&P sectors to decline. U.S. crude was off 4 percent at $50.72 per barrel after the International Energy Agency warned of more selloffs in the near term as stockpiles continue to rise.

"We are going to bounce around here until there is some clarity and some stability in the price of oil and economically in the European Union," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The Dow Jones industrial average <.DJI> rose 88.53 points, or 0.5 percent, to 17,817.74, the S&P 500 <.SPX> gained 13.67 points, or 0.67 percent, to 2,060.41 and the Nasdaq Composite <.IXIC> added 43.31 points, or 0.92 percent, to 4,769.32.

Coca-Cola Co shares climbed 3.2 percent to $42.53 to help lift both the Dow and S&P 500. It reported a better-than-expected profit and sales in North America, its biggest market, rose for the first time in four quarters to offset the impact of a strong dollar on its overseas business.

Starwood Hotels & Resorts Worldwide climbed 6.5 percent to $75.86 after it posted quarterly results and announced plans to spin off its vacation timeshare business.

Even with high-profile earnings misses from multinationals, largely as a result of dollar strength, Thomson Reuters data through Tuesday morning showed 72.7 percent of S&P 500 companies have topped earnings expectations among those reporting results so far. That is above the 69 percent beat rate in the past four quarters.

On the economic front, U.S. wholesale inventories barely rose in December, the latest suggestion that fourth-quarter growth could be revised lower.

Advancing issues outnumbered declining ones on the NYSE by 1,496 to 1,474, for a 1.01-to-1 ratio; on the Nasdaq, 1,541 issues rose and 1,136 fell, a 1.36-to-1 ratio favoring advancers.

The S&P 500 was posting 22 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 39 new highs and 30 new lows.

(Additional reporting by Chuck Mikolajczak; Editing by Jeffrey Benkoe and Nick Zieminski)

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