Business News

Apr 16, 2:37 PM EDT

US stocks rise, extending gains into third day


AP Photo
AP Photo/David Karp
Business Video

Latest Market News
US stocks rise, extending gains into third day

Yahoo, China news send US stocks higher at midday

Yahoo, PNC among early winners among US stocks

Bank of America posts loss, hurt by legal charges

Credit Suisse profits down 34 percent

ASML sees lull in orders from computer chip makers

CSX railroad expects modest 2014 profit growth

Fund manager Q&A: Expect less from bonds

Buy AP Photo Reprints
Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt
Interactive
Are Stocks Bouncing Back?

Major U.S. stock indexes rose Wednesday afternoon and were headed for a third day of gains in a row. Investors welcomed encouraging news about China's economy as they monitored U.S. company earnings. Yahoo and Delta Air Lines were among the companies rising sharply in afternoon trading.

KEEPING SCORE: The Standard & Poor's 500 index rose 13 points, or 0.7 percent, to 1,856 as of 2:32 p.m. Eastern Time. The Dow Jones industrial average gained 125 points, or 0.8 percent, to 16,388. The Nasdaq composite added 31 points, or 0.8 percent, to 4,065. All three indexes remain down for the month after several days of choppy trading.

EYE ON EARNINGS: Investors are closely monitoring company earnings this week as they try to assess whether the impact of a severe winter has begun to ease. Financial analysts expect first-quarter earnings for companies the S&P 500 to fall about 1.2 percent, according to S&P Capital IQ.

"We do think ... the market is focused on what seems to be a worst-case scenario not being realized," said Jim Russell, senior equity strategist at U.S. Bank Wealth Management. "Expectations are low enough where many companies will either meet or beat expectations."

YAHOO FOR ASIA: Yahoo jumped $1.89, or 5.5 percent, to $36.09. The Internet pioneer reported late Tuesday that it is making most of its money from its stakes in two Asian Internet companies, China's Alibaba Group and Yahoo Japan. That overshadowed a 20 percent drop in overall first-quarter earnings.

HIGH FLYERS: Airline stocks posted some of the biggest gains. Delta climbed $1.40, or 4.3 percent, to $33.30, while JetBlue Airways rose 37 cents, or 4.5 percent, to $8.68. Southwest rose 49 cents, or 2.1 percent, to $23.39. American Airlines Group gained $1.25, or 3.7 percent, to $34.97.

CHINESE GROWTH: The world's second-largest economy grew 7.4 percent from a year earlier in the January-March quarter, down from 7.7 percent in the previous quarter, China's government reported. The growth rate appeared strong enough to satisfy Chinese leaders, who are trying to put the country on a more sustainable path without politically dangerous job losses.

FACTORIES HUMMING: The Federal Reserve said Wednesday that factory production rose 0.5 percent in March after a revised 1.4 percent surge in February. The gains over the past two months follow a winter slowdown in January and December that stalled growth across the economy. Higher production is also a sign of greater demand by businesses and consumers.

SECTOR WATCH: All 10 sectors in the S&P 500 index rose, led by companies that make basic materials. That's a bullish sign. Basic materials companies tend to prosper more than others when the economy is expanding. Manufacturing and construction pick up speed, boosting demand for industrial materials like metals. Aluminum maker Alcoa rose 26 cents, or 2.1 percent, to $13.32 and Eastman Chemical rose $1.94, or 2.2 percent, to $88.20.

LITIGATION LETDOWN: Bank of America slumped after reporting a loss in the first quarter. The bank booked $6 billion in costs related to a previously disclosed legal settlement over its home loan lending practices. The stock fell 38 cents, or 2.3 percent, to $16.01.

TROUBLED TECH: Shares in several companies that make circuits for electronics or data storage took a beating Wednesday. Among the biggest decliners were Linear Technology, which fell $1.80, or 3.8 percent, to $45.33, and Analog Devices, which slid $1.09, or 2 percent, to $52.09. Microchip Technology shed 56 cents, or 1.2 percent, to $46.61.

CHILL ON THE TRACKS: CSX fell 71 cents, or 2.5 percent, to $27.59. Severe winter weather contributed to a 14 percent drop in CSX's first-quarter earnings, even as the railroad company's freight volume grew modestly. CSX executives expect modest profit growth for the year, but they also said the impact of the harsh winter will linger into the current quarter.

TREASURYS: Bond prices were flat. The yield on the 10-year Treasury note held steady at 2.63 percent.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.