The major indexes continued to rally on better than expected earnings news and an uptick in consumer spending. The Dow surged 121 points to 13,367 while Nasdaq leaped 34 points to 2675.

On the upside

While facing massive writedowns due to troubled subprime loans, Merrill Lynch (NYSE: MER) may be considering a $5 billion cash infusion from a Singapore government-owned fund.

Research in Motion (Nasdaq: RIMM) posted strong 3rd quarter profit growth citing strong demand for its BlackBerry smartphones.

Shares of Schering-Plough (NYSE: SGP) rebounded in active trading from an analyst upgrade. The stock recently fell due to further delays from studies of its cholestrol drug.

On the downside

Blaming restructing costs and lower warranty sales, electronics retailer Circuit City Stores (NYSE: CC) posted a wider than expected loss.

Brush Engineered Materials (NYSE: BW) reiterated its earning forecast, but weak performance from its magnetic media business was offset by a lawsuit payment. Meanwhile, the company also announced a $90 million acquisition of Techni-Met.

Accounting and finance consulting services provider Resources Connection (Nasdaq: RECN) reported higher revenues and lower profits late yesterday while costs increased.

In the broad market, advancing issues outpaced decliners by a margin of 5 to 1 on the NYSE and by a margin of 3 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks soared 13 points to 781.