NEW YORK (TheStreet) -- The S&P 500 Index, fueled by third-quarter corporate earnings and better-than-feared economic data from China and Europe, has recovered all of its losses in an October plunge, closing at 1,985.
On Tuesday, U.S. markets surged over 1% after a report from the Conference Board showed consumer confidence hit a seven-year high, bolstering investors’ outlook for upcoming the holiday season.
That data outweighed a disappointing durable goods report, which reflected cautious business spending, and came as investors await confirmation on Wednesday from the Federal Reserve it has ended a program of monthly bond purchases to support financial markets.
The S&P 500 closed higher by 1.19%, while the Nasdaq and Dow Jones Industrial Average traded up by 1.75% and 1.12%, respectively.
The Conference Board's consumer confidence index unexpectedly rose to 94.5 in October from 89.0 in September and was the index’s highest reading in seven years.
Confidence is being bolstered by consistent job gains, which have brought unemployment rates below 6%, in addition to falling gasoline prices as supply concerns weigh on global markets.
Oil closed within reach of multi-year lows on Wednesday, with Nymex West Texas Intermediate Crude up just 0.36% in at $81.29 a barrel, while ICE Brent closed higher at $85.95.
”We think low energy costs could be a positive for consumers as we enter the holiday season,” Terry Sandven, chief equity strategist at US Bank Wealth Management, said in a telephone interview.
Durable goods orders in the U.S. unexpectedly fell 1.3% in September, sharply missing median economist forecasts of a 0.5% rise. Sandven said the weak report reflected a cautious tone among businesses. Nonetheless, he believes U.S. stock markets will trade higher into year-end as fourth-quarter earnings forecasts are firmed up.
Energy was the top performing sector in the S&P 500, gaining 1.79% in late afternoon trading. Newfield Exploration (NFX) , Transocean (RIG) - Get Transocean Ltd. Report and Cimarex Energy (XEC) - Get Cimarex Energy Co. Report were leading the sector higher, each gaining over 4%.
Cummins (CMI) - Get Cummins Inc. Report , Whirlpool (WHR) - Get Whirlpool Corporation (WHR) Report and Autonation (AN) - Get AutoNation, Inc. Report were the leading gainers on the S&P 500 on Wednesday, each rising over 5% after reporting better-than-forecast earnings. Retailers Kohls (KSS) - Get Kohl's Corporation (KSS) Report and Coach (COH) were falling the most, losing over 5% each.
In housing markets, the S&P Case-Shiller Home Price Index showed a 0.2% month-over-month increase in housing prices nationwide in August, slightly exceeding estimates of a 0.18% rise. Detroit led monthly home price gains, posting a 0.8% rise, while San Francisco led losers with a 0.4% decline.
U.S. stocks also were bolstered by strong industrial figures in China. Data from the Chinese statistics bureau showed that industrial profits in the country rose by 563.4 billion yuan ($92.2 billion) in September, reversing a 0.6% drop in August.
Guidance from the Federal Reserve has indicated an end to stimulus efforts, as do median forecasts of economists polled by Bloomberg.
"I don’t see how economic data has changed enough for Janet Yellen to not just taper at this point," Brad Wilson, vice president of fixed income portfolio management at Boston Private Bank, said in a telephone interview on Monday evening.
Wilson expects that interest rates will remain low for an extended period, even afterthe Fed ends its bond buying. “It is tough to drive interest rates higher when there is no wage growth,” he said.
In corporate earnings, Facebook (FB) - Get Facebook, Inc. Class A Reportbeat Wall Street forecasts for third-quarter earnings, reporting a profit of 43 cents a share on $3.2 billion in revenue after the market close on Tuesday. Those earnings slightly exceeded forecasts of $40-cents in EPS on $3.12 billion in revenue, however Facebook shares fell slightly in after hours trading.
Gilead Sciences (GILD) - Get Gilead Sciences, Inc. (GILD) Report reported weaker-than-forecast earnings after hours, causing shares to tumble over 1%. The drug maker earned $1.84 in EPS, missing consensus estimates by 8 cents.
Anadarko Petroleum (APC) - Get Anadarko Petroleum Corporation Report reported mixed third quarter earnings after the market close, beating on revenue but missing on EPS by a penny. The company earned $1.16 a share on $5 billion in revenue.
Chevron (CVX) - Get Chevron Corporation Report and ExxonMobil (XOM) - Get Exxon Mobil Corporation Report will report earnings on Friday, giving investors a clearer picture of oil markets heading into year-end.
-- Written by Antoine Gara in New York