By Will Horner 

U.S. stocks drifted higher Wednesday, hovering near record levels, as investors begin shifting their focus to the latest earnings-reporting season, starting with the biggest banks.

The broad S&P 500 index edged up 0.1% after setting its 21st record close of the year. The Nasdaq Composite also bounced around the flatline.

The Dow Jones Industrial Average appeared to have more momentum, rising 155 points to 33829 in recent trading, led higher by Goldman Sachs Group after the bank reported sharply higher profits for the first quarter, benefiting from a turbocharged market and an economic recovery.

Energy stocks also rose, giving the stock market a small boost. The sector was up 1.4% in the S&P 500 in recent trading, gaining alongside a nearly 2% increase in crude oil prices after the International Energy Agency on Wednesday raised its forecast for annual global oil demand. Tech and communication stocks, the market's heavyweights, were trading lower though a day after rallying, putting some pressure on stock indexes.

Analysts say they expect earnings to take up more attention from investors in the days and weeks ahead. Investors say they are optimistic about the biggest American companies' earnings and outlook for the rest of the year, given the projections for a sharp economic recovery. Sizable government stimulus measures and repeated pledges from the Federal Reserve to continue supporting the recovery have largely helped alleviate concerns about the pace of the reopening and the vaccination rollout.

"As the fundamentals emerge in the weeks ahead, there should be some really eye-catching earnings data coming through and some very strong economic data," said Paul O'Connor, head of a multiasset team at Janus Henderson Investors. "It is about working out whether the fundamentals are strong enough to justify what we have seen markets do."

Goldman Sachs shares rose 2.8% after the Wall Street firm reported better-than-expected results for the first quarter. Shares of other banks weren't so lucky.

Wells Fargo fell 1.4% after posting a jump in profits.

JPMorgan Chase shares ticked down 1.5% after the bank said that first-quarter profit nearly quintupled following the release of $5.2 billion it had set aside to cover soured loans.

Other large American businesses will report profits through the week.

"There has never been more bullish expectations on what investors think they are going to hear from companies," said David Donabedian, chief investment officer at CIBC Private Wealth Management. "With earnings season, you get a lot of buy-the-rumour, sell-the-news, and there is this idea that we are going to get a blowout first quarter."

Investors are also awaiting a speech from Federal Reserve Chairman Jerome Powell at noon for clues on the health of the economy and his views on inflation.

The yield on the 10-year Treasury note edged higher to 1.632%, from 1.622% on Tuesday. Yields rise as prices fall.

Investors have pared back their government-bond holdings this year on concern that a sharp and protracted rise in inflation could curb the value of returns from fixed-income assets. Fed officials have said they expect any sharp uptick in inflation over the coming months to be temporary, and that they will keep loose monetary policy in place for the foreseeable future.

"I think it is going to become clear later this year that inflation is going to stay above 2%, and I don't think the bond market is going to allow the Fed to do nothing," said Mr. Donabedian. "We have seen a tidal wave of liquidity and the path of least resistance is upward."

Prices of cryptocurrencies led by bitcoin surged to record levels Wednesday ahead of the public listing of Coinbase Global. Bitcoin hit an all-time high of $64,228 apiece, ether climbed as high as $2,388 and dogecoin -- the meme cryptocurrency created as a joke -- surged 83% to $0.14, according to CoinDesk.

Overseas, the Stoxx Europe 600 gauge edged up 0.3%.

Shares in British bank Barclays unexpectedly sank 10% at the open before recovering much of the loss. Reasons for the drop couldn't be learned. However, some investors speculated the move could have resulted from a trader inputting an order incorrectly, an explanation supported by the stock's quick recovery.

In Asia, major stock indexes ended the day mostly higher. Hong Kong's Hang Seng Index rose 1.4%, and the Shanghai Composite Index rose 0.6%. Japan's Nikkei 225 fell 0.4%.

Michael Wursthorn contributed to this article.

Write to Will Horner at William.Horner@wsj.com

(END) Dow Jones Newswires

April 14, 2021 10:22 ET (14:22 GMT)

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