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NEW YORK — A better-than-expected consumer confidence report sent stocks climbing Tuesday on hopes that Americans’ spending could revive company profits earlier than anticipated. The Dow Jones industrials picked up 260 points, their third straight triple-digit gain. 

But analysts were doubtful the rally would last, saying the market remains nervous about the broader economy’s prospects amid other weaker economic data. An earnings warning from Nortel Networks and mixed results from Palm after the market closed added to the likelihood that stocks would give back some of their gains. 

“We’re continuing to bounce back from the low trading levels we saw last week,” said Robert Harrington, head of listed trading at UBS Warburg. “The question now is of sustainability. When do earnings start to improve? Will it be a third or fourth-quarter story?” 

Harrington attributed much of Tuesday’s rally to institutional buying by portfolio managers as the end of the fiscal quarter approaches. He stressed that many individual investors, burned by the Dow’s 1,468-point drop, remain skittish. 

Nortel’s warning and announcement of 5,000 more job cuts adding to 10,000 previously announced – the latest bad news in the telecom sector – sent its stock down $1.76 to $15, a 10 percent drop, in extended trading. 

Handheld computer maker Palm also fell in late trading, tumbling $5.50 to $10, a 35 percent drop, after beating third-quarter expectations but announcing 250 job cuts and that it was reducing operating expenses. 

Other technology stocks fell in the after-hours session, making it more likely the market would see some selling Wednesday. 

Losses in chip stocks had already limited technology’s overall gains during the day. Wall Street worried that the sub-sector will suffer in the weak economic environment punished stocks including PMC-Sierra, which lost 86 cents to $31.40. 

— The Associated Press 

But investors did buy Dow technology bellwethers Microsoft, up $2.19 at $58.25, and IBM, which rose $4.10 to $99.50. 

Other winning blue chip sectors included oil and retail. ExxonMobil closed up $2.39 at $80.64, while Wal-Mart gained 69 cents to $50.29. Both are Dow stocks. 

Tuesday’s advances came after the Conference Board reported its Consumer Confidence Index shot up to 117 from a revised 109.2 in February. Analysts were expecting a drop to 104.1. The industry group said the rebound was triggered by optimism about the economic outlook and employment prospects over the next six months. 

The numbers are also important because of the role that they might play in a future interest rate cut. The Federal Reserve lowered interest rates at its meeting last week and indicated another cut might be possible before its May meeting if data showed the economy’s weakness was accelerating. 

“The consumer confidence numbers probably make the Fed a little less likely to act intra-meeting. But there will be more reports later that might change its mind,” Harrington, the UBS Warburg trader, said. 

The Fed would likely also consider other economic data, including a Commerce Department report Tuesday showing orders to U.S. factories for big-ticket manufactured goods fell in February for the second straight month, led by a drop in demand for cars, planes and other transportation equipment. 

“A better consumer confidence number leaves more hope that the profit picture might turn in a more favorable direction,” said Michael Strauss, managing director and senior economist at Commonfund. “But I don’t consider it a major economic indicator and I don’t think the Fed does either.” 

Also Tuesday, Johnson & Johnson said it plans to buy drug delivery specialist Alza Corp. for $12.3 billion in stock. J&J fell $2.13 to $83.25, while Alza rose 25 cents to $39. 

Advancing issues led decliners 3 to 2 on the New York Stock Exchange. Consolidated volume was 1.58 billion shares, compared with 1.34 billion Monday. 

The Russell 2000 rose 5.50 to 452.88. 

Japan’s Nikkei stock average fell 1.6 percent, but the news was better in Europe. Germany’s DAX index was up 3.7 percent, Britain’s FT-SE 100 gained 2.7 percent, and France’s CAC-40 rose 2.2 percent. 

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