US stocks end higher as oil drops; banks rally

U.S. stocks ended higher on Tuesday, as oil prices eased to below $105 a barrel and financials rallied on upbeat profit forecast from Bank of America.

The Dow Jones Industrial Average jumped 124.35 points, or 1.03 percent, to 12,214.38; the S&P 500 index gained 11.69 points, or 0.89 percent, to 1321.82; and Nasdaq Composite climbed 20.14 points, or 0.73 percent.

Oil prices fell 0.64 percent to $104.77 per barrel in New York on conflicting and vague reports that Gaddafi and Libyan rebel groups may be in negotiations to settle on a peace deal.

Bank of America led the rally in financial sector after its chief executive Brian Moynihan provided a very upbeat multi-year outlook and also said the bank plans to increase its share buyback program and might raise its dividend.

Among the Dow components, Bank of America surged 4.35 percent and American Express gained 3.5 percent, while JPMorgan advanced 2.68 percent.

Sprint Nextel Corp (NYSE:S) shares surged 4.91 percent on news that Deutsche Telekom AG has been in talks to sell T-Mobile USA to Sprint in exchange for a stake in the combined entity.

Urban Outfitters Inc. (NASDAQ:URBN) shares plunged 16.66 percent as its fourth quarter earnings fell short of analysts’ expectations. Its quarterly net income declined to $75.2 million or $0.45 per share compared to $77.7 million or $0.45 per share in the same quarter last year, while analysts expected a net profit of $0.52 per share.

Expedia Inc. (NASDAQ:EXPE) shares gained 2.86 percent after the company stock was upgraded to “buy” rating from “hold” rating at Citi.