Stocks Close Higher After Turbulent Session

Updated from 4:13 p.m. EDT

Stocks in the U.S. underwent a volatile session Wednesday amid another flood of mixed earnings reports, ultimately finishing to the upside.

The Dow Jones Industrial Average shot up nearly 120 points in late morning before sinking back to earth and then climbed steadily in the last half of the session.

In the end, the Dow added 42.99 points at 12,763.22, and the S&P 500 was up 3.99 points to 1379.93, as both indices booked gains of about 0.3%. The Nasdaq Composite stayed well in positive territory throughout, and ended higher by 28.27 points, or 1.19%, to 2405.21.

"We're in one of those days where there's no economic data, so we're just going company by company, conference call by conference call," said Art Hogan, chief market analyst with Jefferies. "Everything gets a reaction or, much of the time, an overreaction. It's not so unusual to have this kind of day as we try to assess where we stand so far in the earnings season."

Since no big economic reports were released, he said, the market has no anchor. "There's no underlying feeling that things are better or worse, no sort of overarching thought, so stocks can go on this crazy rollercoaster."

Charles Rotblut, senior market analyst with Zacks Investment Research, also pointed out that when equity measures briefly surged this morning, they encountered the old February highs that served as the top end of their trading range for most of 2008. The indices had managed to worked past those resistance levels on Friday, but Rotblut believes they could be heading back into that range, given the lack of follow-through so far.

Paul Nolte, director of investments with Hinsdale Associates, concurs. "We're still in that range," he said, noting that he has pegged the S&P top at 1400 and the Dow high-end at around 12,900. "We got right up to the top of that at the end of last week and turned tail from there. I think the market on the whole is still in a corrective phase from this month's really."

Despite the higher close, breadth was lackluster to poor. Advancers only barely edged out decliners on the New York Stock Exchange, and on the Nasdaq -- which saw the strongest finish by far -- losers outpaced winners by a 3-to-2 margin. Volume on the exchanges reached roughly 2.03 billion and 2.14 billion shares, respectively.

Nolte noted that the technology-laden Nasdaq, in particular, was being heavily skewed by only a few standout names. "Below the surface, the market's not acting very well," he said.

Among those brighter spots in tech, meanwhile, was virtualization-software developer VMware VMW, which posted better-than-expected sales and saw shares bounce 4.9%. Broadcom's BRCM top line was also above par, and the chipmaker's first-quarter earnings climbed 21%. Its shares surged 16.3%.

Also, Apple AAPL ran up 1.7% ahead of its earnings release. In post-close trading, however, the stock erased all of those losses, lately sinking 4.1%, after the Mac maker guided below Street estimates for the current quarter. As for the fiscal second quarter, earnings surged 36% to $1.05 billion on sales of $7.51 billion, easily beating expectations on both counts.

Away from the technology space, Boeing BA gave legs to the Dow after reporting that its quarterly profit swelled 38% year over year to $1.21 billion, surpassing estimates on a per-share basis. The aerospace-equipment maker was the index's best-performing component today, spiking 4.5% at $82.09.

Among the big losers, however, was Ambac ABK. Shares tanked 42.6% after the beleaguered bond insurer posted a first-quarter shortfall of $1.66 billion, or $11.69 a share, as its results were weighed down by $2.77 billion in mortgage-related losses.

Back in the tech space, Yahoo! YHOO turned in a first-quarter adjusted profit that topped subdued analyst targets, but shares were still off 1.6% as investors doubted the results would be stellar enough to force Microsoft MSFT to boost its $44.6 billion bid for the Internet-portal operator. A Credit Suisse analyst cut the stock to neutral from outperform on likeminded concerns.

Yahoo! has argued that the offer undervalues the company, but Microsoft CEO Steve Ballmer said at a conference, according to Bloomberg, that it won't increase the value of the proposal.

Elsewhere, both Delta DAL and prospective suitor Northwest NWA were hit by surging fuel costs last quarter and respectively posted adjusted shortfalls of $274 million and $191 million. Still, both stocks were taking back some of yesterday's big losses, which had been spurred by a tremendous miss at United Airlines parent UAL Corp. UAUA.

Delta and Northwest announced earlier this month that they plan to merge. Shares each bumped into the green earlier, but were recently trading down 3.5% and 5%, respectively.