LONDON (ShareCast) - Wall Street advanced for the second day in succession, although compared to the recent wild rides on the market, today was a more normal day, as investors held fire ahead of tomorrow's interest rate decision.

Across the markets the Dow-Jones 30 rose 96 to 12,480 while the broader-based S&P 500 jumped 8 points to 1,362. The NASDAQ Composite climbed 8 points to 2,358.

Better than expected December US durable goods orders provided an early lift. The index of new durable goods orders rose 5.2% in December, and was up 2.6% excluding transportation orders. Economists had expected a rise of 1.6% or no change when transportation orders are excluded.

House price data made less pleasant reading. The S&P/Case-Shiller Home Price index, which measures house price trends in 10 major metropolitan areas, showed a record fall of 8.4% in the year to November, following a 6.7% annual decline in the preceding month. However, the market managed to put a positive slant on this news, figuring it makes a rate cut tomorrow more likely.

IT company Unisys led blue-chips higher as it expects to continue to improve its profit performance in 2008. The company intends to streamline the organisation further and implement more cost reduction measures.

Printer company Lexmark was in the blue after announcing fourth quarter earnings per share that were almost double what the market was expecting. The company’s margins benefited from a shift away from entry-level inkjet printers to higher margin laser printers and multi-function devices.

Valero Energy was another stock boosting its “earnings surprise” rating, as its EPS for the fourth quarter came in way ahead of analysts’ forecasts, at $1.02 compared with a market consensus of 64 cents.

Dow Chemical said rising prices and strong demand in non-domestic markets helped it beat analysts’ forecasts for fourth quarter earnings. The chemical company’s earnings per share in the fourth quarter dipped to 49 cents a share from $1 a year earlier, but after restructuring costs were excluded the EPS came in at 84 cents, 4 cents above the market consensus.

Crippled mortgage lender Countrywide Financial was wanted, despite slumping into the red in the fourth quarter. The nation’s largest mortgage lender suffered a fourth quarter loss of $422m, compared with a gain of $622m in the final quarter of 2006. The company’s provision for credit losses shot up to $924m. compared with $73m in the fourth quarter of 2006.

The losses did not deter suitor Bank of America from announcing it was pressing ahead with its agreed takeover of Countrywide.

Post-it and Scotch tape group 3M edged higher, despite fourth quarter earnings dipping to $851m from $1.18bn in the corresponding quarter of 2006. This year’s earnings were distorted by a $12m loss relating to special items while the 2006 figures were boosted by a net gain of $354m, also relating to special items.

Bond insurers such as Ambac Financial surged higher after CNBC reported that the New York State Insurance Department had formally asked credit rating agencies to hold fire on reviewing the bond insurers ratings long enough to allow a rescue package to be launched. A spokesman for the Insurance Department later denied that any such request had been made.

Sprint Nexteland Clearwire raced ahead on revived rumours that the two may combine their networks.

Software company Novell is in demand after an upgrade to "buy" from "hold" by Jefferies. The broker raised its price target to $7.50 from $7.

On the downside, oil field services company Smith International was one of the worst performing S&P 500 stocks, after announcing post-tax fourth quarter earnings that were 17% higher than a year ago at $167m, or 83 cents a share. However, the company said it failed to improve margins in the fourth quarter and confessed that the results were “on the lower-end of our fourth quarter expectations.”

US Steel dived lower after revealing sharply lower fourth quarter net income of $35m, compared with net income of $269m in the third quarter and $297m in the fourth quarter of 2006.

Flat volumes at cola bottler Pepsi Bottling perturbed the market which marked the shares lower. The company announced a 39% slide in fourth quarter profits after taking an $11m hit for various one-off items.

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