Stocks rose on Wednesday after Apple's blowout quarter overshadowed a drop in durable goods and further lifted optimism in an earnings season that has far outstripped expectations.
In its latest policy statement, the Federal Reserve repeated its promise to leave interest rates on hold until at least late 2014, but gave few clues into whether it might offer additional stimulus later this year. Equities were little changed by the news.
Quarterly profit at Apple Inc almost doubled on a jump in iPhone sales, surging past expectations, while revenue also easily topped analysts' estimates. The stock jumped 9 percent to $610.55 and recorded its biggest one-day percentage gain since November 2008.
Apple's stock dominates major equity indexes because of its weighting. The stock has recently sold off, partly on fears that earnings could disappoint. Wednesday's rally in Apple shares helped the Nasdaq climb 2 percent and could propel the market back to 2012 highs hit earlier this month.
Apple is the largest company in the world, so it is going to drag the market wherever it goes. The results there were great, but the number of Apple products sold doesn't give any indication into the fundamentals of the economy, said Phil Silverman, managing partner at Kingsview Capital in New York.
The Dow Jones industrial average <.DJI> was up 75.04 points, or 0.58 percent, at 13,076.64. The Standard & Poor's 500 Index <.SPX> was up 16.80 points, or 1.22 percent, at 1,388.77. The Nasdaq Composite Index <.IXIC> was up 61.51 points, or 2.08 percent, at 3,023.11.
The earnings season so far has been stronger than expected. With 200 of the S&P 500 companies reporting, three-fourths have topped estimates, according to Thomson Reuters data.
With Apple's results, analysts' projected first-quarter S&P 500 earnings growth rate is 6.9 percent, up from about 4 percent earlier in the week, and well above the 3.2 percent forecast at the start of the earnings period.
When Apple is excluded, the growth rate would be 4.6 percent, meaning the company has added 2.38 percent to the rate, according to Thomson Reuters earnings research analyst Greg Harrison.
Boeing Co posted higher quarterly profit, helped by increased commercial aircraft sales, and raised its earnings forecast for the year. Boeing's stock shot up 4.1 percent to $76.21 and was the Dow's biggest percentage gainer.
Caterpillar Inc said profit rose 29 percent, but the heavy equipment maker stoked Wall Street's fears over emerging markets by repeatedly citing slowdowns in China and Brazil. Caterpillar's stock fell 4.7 percent to $103.35 and limited the Dow's advance.
In a troubling sign, March durable goods orders fell 4.2 percent in the biggest decline in three years. The report was the latest to show softness in economic data.
The durables show that growth is slowing, and that's not something we're seeing reflected in today's market, Silverman said. People are going to need to take another look to see how attractive valuations really are.
The S&P 500 has fallen as much as 4.2 percent after jumping about 30 percent from October to a 2012 peak in April. Fears of a resurgent debt crisis in Europe have been a major driver of the pullback.
(Editing by Jan Paschal)