Updated from 4:09 p.m. EDT
Stocks rose sharply Wednesday as strong earnings from
sparked strength in the beaten-down financial and transportation sectors.
Dow Jones Industrial Average
rose 104.62 points, or 0.95%, to 11,079.46, thanks to gains of 2.2% or more in
added 12.07 points, or 0.97%, to 1252.19, moving back into positive territory for the year. The
rose 34.14 points, or 1.62%, to 2141.20.
All four indices would have ended about a half-percentage point higher if not for a wave of selling in the session's final 30 minutes. Among sectors, the Philadelphia Stock Exchange Banking Sector Index rose 0.5%, while the Dow Jones Transportation Index rose 2.9%.
"The S&P 500
rallied off its 200-day moving average, which follows the same pattern from last year," said Paul Mendelsohn, chief with Windham Financial. "We became oversold after a few down days, so we're bouncing from exactly where we should've. Earnings from two companies that are important to the economy were strong, which is helping this bounce."
Morgan Stanley's first-quarter earnings more than doubled from last year to $1.96 billion, or $1.86 a share, beating analysts' consensus estimate by about 40 cents. Revenue surged 48% to $8.94 billion, also better than expected. Shares were higher by $2.46, or 4.3%, to $59.48.
At FedEx, fourth-quarter profit rose 27% to $568 million, or $1.82 a share, beating the Wall Street estimate by a nickel. Revenue rose 10% to $8.49 billion; about $70 million above forecasts. FedEx jumped $5.54, or 5.1%, to close at $113.86.
Volume was low for the second-straight session, with about 1.66 billion shares moving on the
New York Stock Exchange
. Advancers outpaced decliners by a 3-to-1 margin. About 1.86 billion shares changed hands on the Nasdaq, with advancers beating decliners 7 to 3.
"There was no negative headlines to push us downward today," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "We were lucky today without any economic data or Fed members speaking, so we let strong corporate earnings move us higher.
"The lack of real news hid the constant drumming of fears. There wasn't a lot of volume, so this isn't a trend. We're still in for volatile movements," Suskind said.
Indices also got support after the Energy Department reported stronger-than-expected builds in gasoline, crude, and distillate inventories last week. The report showed a build of 1.4 million barrels in crude stocks, the highest supply level in eight years. Crude futures spiked by 99 cents to finish the session at $70.33 a barrel, having traded below the $69 level earlier.
Other commodities reversed earlier weakness as well, Gold finished up $10.50 to $591 an ounce, and silver added 15 cents to $10.42 an ounce. Copper tacked on a penny at $3.11 a pound. Meanwhile, the 10-year Treasury note was down 1/32 in price to yield 5.15%, and the dollar fell against the yen and euro.
To view Gregg Greenberg's video take on today's market, click here
"While we may move higher, we're still in a wait-and-see pattern," said Art Hogan, chief market analyst with Jefferies. "We're still worried the
will overshoot, go too far and impact corporate earnings. We will have to see how hawkish their commentary will be at the meeting next week."
European stocks were higher, but investors will have to keep their eye on the central bank there after ECB president Jean-Claude Trichet talked tough on inflation in an address to the European Parliament.
"We are not satisfied with what we are observing with regard to inflation in our own area,'' Trichet said, according to wire reports. "We'll continue to do all that's necessary to counter inflationary risks and anchor inflationary expectations.''
London's FTSE 100 gained 0.1% to 5665, while Germany's Xetra DAX rose 0.2% to 5503. In Asia, Japan's Nikkei was little changed at 14,644, while Hong Kong's Hang Seng rose 0.3% to 15,659.
Concerns about next week's meeting of the Fed led markets to a mixed session on Tuesday. For the day, the Dow rose 33 points to 10,975, while the S&P 500 finished flat at 1240 and the Nasdaq fell 3 points to 2107.
"There's a lot of uncertainty, giving us a downward trend leading up to the meeting," said Edgar Peters, chief investment officer with Pan Agora. "If the Fed does as expected with a 25-basis-point hike, we may see a relief rally, as there's an underlying fear the Fed will raise by more and go too far."
In other corporate news,
might not meet its goal of returning to a profit by 2008,
reported, quoting unnamed executives at the automaker. High gasoline prices are hurting sales of sport-utility vehicles, while competition is crimping pickup truck sales, the executives told the news service.
However, Mark Fields, Ford's president of the Americas, responded to the report, saying the automaker is still committed to its plan and on track to meet its targets. Ford gained 3 cents, or 0.5%, to close at $6.43.
was cut to neutral from overweight at Prudential, which cited rising interest rates and their impact on asset markets. The brokerage lowered its price target on the bank's stock to $45 from $51, saying an initiative to expand businesses like commodities trading could cause more earnings volatility. Shares rose 72 cents, or 1.8%, to $41.21.
was upgraded to buy at Merrill Lynch, which argued the stock is reasonably priced ahead of an expected margin recovery in the second half. Motorola finished up 17 cents, or 0.9%, to $20.
Motorola's gain was aiding the Philadelphia Semiconductor Sector index, which rose 2.1%. In other sectors, the Philadelphia Housing Sector Index was higher by 3%, the Amex Airline Index added 2.6%, and the S&P Retail index tacked on 1%.
In other ratings moves, Morgan Stanley upgraded
to overweight from equal-weight. Coca-Cola gained 44 cents, or 2.3%, to $19.66.
Credit Suisse raised its rating for
RF Micro Devices
to neutral from underperform, stating it does not see demand shrinking. The firm also downgraded
to neutral from outperform, citing slower demand and higher inventories.
RF Micro Devices rose 25 cents, or 4.1%, to $6.38. ATI Technologies ended up 38 cents, or 2.5%, to $15.32.
Two bidding groups are reportedly preparing offers for
that are at or slightly below the broadcaster's current market quote, published reports said. The competing teams include one led by rival Spanish-language broadcaster
. The other one includes private equity companies Texas Pacific, Thomas H. Lee and others.
Univision fell $1.56, or 4.4%, to $33.84. Meanwhile, Televisa was higher by 99 cents, or 5.7%, to close at $18.50.
raised its quarterly dividend to 10 cents from 8 cents. In addition, Best Buy added about $1 billion to its stock buyback authorization. Shares lost 13 cents, or 0.3%, to $52.80.