Wall Street ends higher as jitters about earnings and oil recede
U.S. stocks closed higher on Wednesday, fueled by gains in oil companies and speculation that upcoming first-quarter earnings reports might not be quite as weak as previously thought.
All 10 major S&P 500 sectors gained, with the energy index leading, up 2.3 percent. U.S. crude jumped more than 5 percent after a lower-than-expected build of U.S. crude stockpiles.
Intel jumped 4.25 percent to $32.83 after the chipmaker said late on Tuesday it expects flat revenue for the entire year despite some weakness in the first quarter.
Investors have feared the March-quarter earnings season, just getting under way, would be crippled by low oil prices, a strong dollar and extreme weather in the eastern United States. First-quarter profits for S&P 500 companies are seen dropping 2.6 percent, according to Thomson Reuters data.
"Companies can jump over a bar that's about as low as a limbo stick," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "Beating expectations should be relatively easy."
Of the 36 companies in the S&P 500 that have reported so far, 81 percent beat expectations, better than the 63 percent of companies exceeding expectations in a typical quarter.
But just 47 percent of companies exceeded revenue expectations, worse than 61 percent seen in a typical quarter. That suggests companies are bolstering their bottom lines by cutting costs instead of by expanding their businesses.
U.S. shares also benefited after the European Central Bank said it remained committed to its full asset-buying program to revive the euro zone economy.
The strong dollar hurts U.S. companies dependent on overseas sales, while slumping oil prices erode the profits of energy companies.
But many industrial and transportation companies benefit from cheap oil and its derivatives. Delta Air Lines posted first-quarter profit above analysts' expectations and its stock rose 2.60 percent to end at $44.20.
The Dow Jones industrial average rose 75.91 points, or 0.42 percent, to close at 18,112.61. The S&P 500 gained 10.79 points, or 0.51 percent, to 2,106.63 and the NasdaqComposite added 33.73 points, or 0.68 percent, to end the day at 5,011.02.
Wednesday's gains bring the Nasdaq to within striking distance of its record-high close of 5,048.62 points set in 2000 during the dot-com boom.
Bank of America's shares ended down 1.14 percent at $15.64. First-quarter profit at the No. 2 U.S. bank by assets narrowly beat analysts' estimates.
After the bell, video streaming company Netflix posted quarterly results that sent its shares 12 percent higher.
On Wednesday, advancing issues outnumbered declining ones on the NYSE by 2,037 to 1,011, for a 2.01-to-1 ratio; on the Nasdaq, 1,821 issues rose and 928 fell for a 1.96-to-1 ratio.
The S&P 500 posted 18 new 52-week highs and 1 new low; the Nasdaq Composite recorded 107 new highs and 18 new lows.
About 6.7 billion shares changed hands on U.S. exchanges, above the 6 billion daily average for the month to date, according to BATS Global Markets.
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