The S&P 500 and the Nasdaq rose on Tuesday as better-than-expected factory orders and a surge in vehicle sales at Ford Motor Co provided more evidence of an economic recovery.

Shares of casino operators traded mostly higher Tuesday — led by those with properties in Macau — as investors remained upbeat about the latest gaming revenue figures for the Chinese enclave.

Shares of U.S. airlines soared on Tuesday, shaking off a stagnant broader market as strong December traffic reports raised hopes for a rebound in air travel.

Shares of Palm Inc. jumped Tuesday after an analyst initiated coverage of the company and predicted that wider distribution of its smartphones will help inflate its subscriber base.

Shares of potash fertilizer companies jumped on Tuesday following the settlement of a Chinese potash contract, a long-awaited development that prompted an analyst to upgrade key companies in the sector.

Shares of Vertex Pharmaceuticals Inc. fell Tuesday after a Wedbush Securities analyst issued a downgrade, citing valuation and limited upcoming catalysts.

Major business events and economic events scheduled for Wednesday: NEW YORK — The Institute for Supply Management releases its service sector index for December, 10 a.m.

European and U.S. stock markets took a breather Tuesday as some of the optimism that drove the previous session’s hefty gains was dented by disappointing U.S. housing data.

Shares in Palm Inc rose 5 percent on Tuesday after Morgan Stanley started coverage on the smartphone maker with an “overweight” rating.

Among the premarket stories for Tuesday, Jan. 5, from AP Financial News: — A Stifel Nicolaus analyst boosted his rating on credit card lender Capital One Financial Corp., saying the worst of losses from loans is likely past, and the company is prepared for regulatory changes in the sector.