Markets get strong boost from news in U.S., in Spain

Stocks stormed higher Tuesday after promising signals about the profitability of U.S. companies and a strong debt auction by Spain. The Dow Jones industrial average rose for the fourth day in five and posted its biggest gain in a month.

European stocks had their best day in four months after Spain, the latest flashpoint in the European debt crisis, attracted strong investor interest at an auction of two-year debt.

The Dow Jones industrial average closed up 194.13 points, or 1.5 percent, at 13,115.54. It was up as much as 210 points Tuesday afternoon. The Dow has had only one 200-point rise this year, a gain of 218 points on March 13.

First-quarter results have begun to pour in from companies, and traders have been impressed so far. On Tuesday, Coca-Cola said its first-quarter profit was better than Wall Street analysts had forecast. Goldman Sachs and Johnson & Johnson also posted strong results.

The S&P 500 gained 21.21 points, or 1.6 percent, to 1,390.78. All 10 of its industry groups rose – nine of them by more than 1 percent.

The Nasdaq composite index soared 54.42 points, or 1.8 percent, to 3,042.82. Apple, the most valuable company by market value, rose 5.1 percent after five straight days of losses that wiped out about $60 billion in market value.

 

Clash with labor may lead to liquidation, Hostess says

Bankrupt Twinkie-maker Hostess Brands Inc. is going toe-to-toe with its workers’ union in a clash that the company said may lead to its own liquidation.

A two-day trial began Tuesday in which Hostess will try to convince a federal bankruptcy judge in New York to allow it to reject its existing collective bargaining agreements with the Teamsters and bakers’ unions.

The maker of Ho Hos, Ding Dongs and Wonder Bread filed for Chapter 11 protection in January, less than five years after emerging from its last bout of bankruptcy.

The unions have rejected the company’s final cost-cutting proposal, which would lower pension benefits for the organizations’ members, tighten work rules and outsource some delivery work. Hostess is hoping that the judge, who is expected to rule in mid-May, will allow the Texas company to implement its plans anyway.

But if Hostess’ request is granted, the unions have threatened to strike. The company said such an action would immediately force it to liquidate, causing its brands and its 18,500 jobs to disappear.

Hostess operates a bakery in Biddeford that employes about 370.

 

German resin plant blast could hurt auto production

A deadly explosion at a German resin supplier could soon force automakers to cut production at selected plants because the resin is essential to make fuel and brake lines.

Auto industry leaders met Tuesday in Southfield, Mich., to explore alternative sources for CDT, a chemical that is critical to the production of a plastic resin called Nylon 12 or PA-12.

Research firm IHS Automotive projected that shortages of the chemical, which was already in short supply, are “likely to be serious” and could curb vehicle production. The March 31 explosion killed two workers at Evonik Industries in Marl.

General Motors confirmed that some of its suppliers have been affected by the disruption, and other auto companies said they were assessing the situation.