Markets rally on company results, outlooks

By @ibtimes on

Strong profits and outlooks from tech and manufacturing companies propelled U.S. stocks higher on Wednesday, delivering the biggest lift to sentiment since quarterly earnings reports began a week ago.

Leading the broad rally were Intel Corp , the most actively traded stock on the Nasdaq, and United Technologies Corp , Dow components that gave strong outlooks. Chipmaker Intel forecast second-quarter sales well above analyst expectations while United Tech raised its full-year profit view.

Shares of Intel rose 6.5 percent to $21.14 and was the biggest percentage gainer on the Dow, followed by United Tech, up 4.3 percent to $85.94.

The Semiconductor Holders ETF rose 3.8 percent while the PHLX Semiconductor index <.SOX> jumped 3.4 percent, the largest percentage move in seven months.

It isn't just the good reports, but also the encouraging comments about how things look for the remainder of the year, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

This is a testament to the strength of earnings we can expect to come out from here, and a marked contrast to what we've seen so far of results that weren't so disproportionately good, added Luschini, who helps oversee $53 billion and owns Intel.

Apple Inc is scheduled to report after the market's close. Its stock rose 2.1 percent to $344.93. The tech company is expected to post stronger profit and revenue.

About 78 percent of companies traded on the New York Stock Exchange were in positive territory while 70 percent of the Nasdaq rose. The S&P information technology group <.GSPT> led the index, rising 2.2 percent.

The Dow Jones industrial average <.DJI> was up 173.47 points, or 1.41 percent, at 12,440.22. The Standard & Poor's 500 Index <.SPX> was up 15.90 points, or 1.21 percent, at 1,328.52. The Nasdaq Composite Index <.IXIC> was up 49.91 points, or 1.82 percent, at 2,794.88.

Sales of previously owned U.S. homes rose more than expected in March, a trade group said on Wednesday, suggesting the housing market's downward trend may be close to hitting a bottom.

This is obviously an encouraging number, and it suggests that we're beginning to see the sputtering of the uptrend in the housing cycle, said Richard Bernstein, chief executive officer of Richard Bernstein Capital Management in New York.

The PHLX housing sector <.HGX> index rose 1 percent. Homebuilder D.R. Horton Inc added 2 percent to $12.05.

Among companies adding to the positive tone were Yahoo Inc , VMware Inc , Freeport-McMoRan Copper & Gold and EMC Corp , which also raised its profit view.

On the downside, International Business Machines Corp slipped 0.4 percent to $164.76 after reporting a drop in signings of new business at its global services division during the first quarter. However, the Dow component's profit and revenue came in above analysts' projections and it raised its full-year profit view.

Textron Inc reported a first-quarter profit that missed expectations and the stock fell 2.5 percent to $25.13.

(Editing by Kenneth Barry)

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