Strong profits, outlooks lead markets up 1 percent

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 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, which was the biggest percentage gainer on the Dow, followed by United Tech, up 4.2 percent to $85.82.

The Semiconductor Holders ETF rose 4 percent while the PHLX Semiconductor index <.SOX> jumped 3.6 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.

About 82 percent of companies traded on the New York Stock Exchange were in positive territory while 78 percent of the Nasdaq rose. All ten S&P sectors were in positive territory, led by the information technology group <.GSPT>, up 2.4 percent.

The Dow Jones industrial average <.DJI> was up 191.41 points, or 1.56 percent, at 12,458.16. The Standard & Poor's 500 Index <.SPX> was up 18.62 points, or 1.42 percent, at 1,331.24. The Nasdaq Composite Index <.IXIC> was up 55.48 points, or 2.02 percent, at 2,800.45.

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 1.7 percent. Forest products maker and homebuilder Weyerhaeuser Co gained 1.9 percent to $22.67.

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 0.3 percent to $164.98 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 1 percent to 425.52.

(Editing by Kenneth Barry)

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