By Saumya Vaishampayan
U.S. stocks rose on Wednesday, boosted by higher oil prices and
earnings from Intel Corp. and Delta Air Lines Inc.
The Dow Jones Industrial Average advanced 104 points, or 0.6%,
to 18141. The S&P 500 rose 15 points, or 0.7%, to 2111, and the
Nasdaq Composite Index added 40 points, or 0.8%, to 5017.
Traders said stock-market volumes were higher than in recent
sessions because of activity around earnings, though levels
remained subdued.
Energy stocks in the S&P 500 rose 2.2%, notching the biggest
sector gain as the price of oil continued to rise. Crude-oil
futures surged 5.2% to $56.05 a barrel. Exxon Mobil Corp. and
Chevron Corp. added about 22 points to the Dow's overall gain.
Investors focused on first-quarter earnings and outlooks.
Expectations were slashed going into the reporting season as
companies contended with the strong dollar and low oil prices in
the period. Including results from 37 companies, S&P 500
earnings are expected to fall 5% from a year ago, according to
FactSet.
"The slowdown in growth, the fall in energy prices, the weather
and the West Coast port strike all have investors somewhat cautious
as we go through earnings season," said Alan Gayle, director of
asset allocation at RidgeWorth Investments, which has $43.5 billion
under management.
In earnings news, Delta said earnings in its March quarter more
than tripled, beating analyst expectations as the company benefited
from lower fuel prices. The airline said it would reduce
international capacity by 3% as it deals with the strong dollar.
Shares rose 2.3%.
Intel shares rose 4.5%, contributing nine points to the Dow's
overall gain. The chip maker late Tuesday reported a 3% rise in net
income on overall revenue that was flat compared with the year-ago
period. Intel said last month that revenue would suffer in the
first quarter due to sagging sales of personal computers. A bright
spot was the data center group, which posted a 19% jump in
revenue.
Bank of America Corp. said Wednesday it swung to a first-quarter
profit. Still, results missed analyst expectations, pushing shares
down 0.8%.
Updates on monetary policy in Europe added to the positive tone.
The European Central Bank kept rates unchanged, as expected,
leaving its main lending rate at a record low. ECB President Mario
Draghi emphasized the central bank remains committed to its
bond-buying program. France's CAC 40 rose 0.7% and Germany's DAX
added less than 0.1%.
"Central banks across the board still look like they're going to
stay very accommodative and keep interest rates low for a long
time, which equity investors like," said Chris Gaffney, president
of EverBank World Markets.
Economic data on Wednesday was mixed. U.S. industrial output
fell in March and posted the first quarterly decline since the
recession ended. The Federal Reserve said industrial production
fell 0.6% from the prior month. Economists surveyed by The Wall
Street Journal had expected a 0.4% decline in industrial
production. Separately, confidence among U.S. home builders rose in
April.
Paul Karos, senior portfolio manager at Whitebox Mutual Funds,
which manages about $900 million, said he bought airline stocks
earlier this year as they should benefit from low oil prices. "They
have the clearest cost benefit [from low oil prices] of anybody in
transports," he said. Even with oil prices rebounding in recent
sessions, those prices are still down nearly 50% since last June.
"That's a huge windfall for the industry," he added.
Gold futures added 0.8% to $1202.00 an ounce. The yield on the
10-year Treasury note fell to 1.887% from 1.904% on Tuesday. Yields
fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
Access Investor Kit for Intel Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4581401001