NEW YORK (AP) — A new sign of recovery in the housing market and strong corporate earnings sent stocks
higher for a second day.
The
Dow Jones industrial average rose 103.16 points, or 0.8 percent, to
12,908.70 on Wednesday, a strong showing for what has been a mediocre
July so far. The index has risen only four times in the last 12 trading
days.
"The market expects bad news, so when it doesn’t get it, it
rises," said John Manley, chief equity strategist at Wells Fargo
Advantage Funds. "Earnings haven’t been disastrous for the quarter."
A
big gain by Intel after it posted a strong earnings report drove up
technology stocks, especially other chip makers. Those companies, plus
industrials, were responsible for much of the market’s gains. The Nasdaq
composite climbed 32.56 points, or 1.1 percent, to 2,942.60.
The
government reported that builders broke ground last month on the most
new homes and apartments in nearly four years. The 6.9 percent jump
brought the number of housing starts to the highest since October 2008.
The news came a day after a gauge of confidence among U.S. homebuilders
jumped to the highest level in five years.
The Standard &
Poor’s 500 index rose 9.11 points, or 0.7 percent, to 1,372.78. Amphenol
jumped nearly 15 percent, the most in the index, after the maker of
electronic cables and connectors reported second-quarter earnings that
were higher than analysts were expecting. Its stock rose $7.58 to
$58.94.
For several weeks, big companies have talked down
prospects for big jumps in earnings, and Wall Street analysts have
slashed their forecasts in response.
At the start of the earnings
season last week, they said earnings for companies in the S&P 500
would likely fall 2 percent, according to S&P Capital IQ.
Earnings
are still expected to fall, marking the first quarterly decline in
nearly three years, but several companies have delivered pleasant
surprises nonetheless. Honeywell International, a big technology and
manufacturing company, reported an 11 percent increase in second-quarter
income Wednesday, more than Wall Street was expecting, thanks to higher
demand for its products. Honeywell also raised its forecast for
full-year profits. Its stock jumped $3.64, or 7 percent, to $58.18.
Of
the 65 companies in the S&P 500 to report earnings so far, 43 have
beat estimates, or 66 percent, according to S&P Capital IQ. That is
slightly higher than the 62 percent long-term average.
"Many of
the risks — an anemic European economy, a slowdown in Asia — have been
factored into earnings expectations," said Talley Leger, investment
strategist at Macro Vision Research, an investment consulting firm.
"That’s why we’re seeing positive surprises."
Other earnings
reports disappointed. Bank of America reported income that beat most
analysts’ expectations for the second quarter, but its revenue fell
short. The stock fell 39 cents, or nearly 5 percent, to $6.59. Profit
declined for PNC Financial Services Group and the investment manager
BlackRock, sending both stocks down more than 0.5 percent.
Among
the gainers Wednesday was Intel, which rose 83 cents, or 3 percent, at
$26.21.
Investors also piled into Vivus Inc., pushing its stock up
nearly 10 percent, after the drug maker announced approval from
regulators to sell a new weight-loss pill. Doctors consider the pill,
Qsymia, the most effective of a new generation of anti-obesity drugs.
The company plans to start selling it by the end of the year.
Madison
Square Garden’s stock lost 1 percent after the owner of the New York
Knicks NBA team confirmed that it was losing star player Jeremy Lin to
the Houston Rockets. The Knicks said they wouldn’t match a three-year,
$25 million offer for the player. MSG’s stock fell 36 cents to $35.45.
In
addition to housing news, the Federal Reserve said Wednesday that its
survey of the economy across the country showed modest expansion in June
and early July, but that growth and hiring slowed in several regions.
In
his second day of testimony before Congress, Federal Reserve Chairman
Ben Bernanke did not signal any new stimulus is imminent, though he did
say the Fed was looking at "ways to address the weakness in the economy
should more action be needed to promote a sustained recovery in the
labor market."
Treasury prices rose slightly as demand for
low-risk assets remained strong. The yield on the benchmark 10-year
Treasury note fell to 1.49 percent from 1.50 percent late Tuesday.
Germany auctioned $6.14 billion in two-year treasury notes Wednesday
with an average interest rate, or yield, of minus 0.06 percent.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 3.6
billion shares.
Copyright 2012 The Associated Press.