Stocks rose Wednesday on news of positive earnings reports and higher oil prices. For investors, any good news comes as a welcome surprise this earnings season, which is widely expected to be the worst in years.
NEW YORK (AP) — Rising corporate profits and a jump in oil prices helped push the stock market to a modest gain on Wednesday. Delta and Intel led the way up after turning in results that beat Wall Street’s forecasts. The price of oil soared to its highest price this year, driving up energy stocks.
For investors, any good news comes as a welcome surprise this earnings season, which is widely expected to be the worst in years. Analysts predict that companies in the S&P 500 will report a 3 percent drop in profits. Most of the blame lies with the slump in oil prices over the past year, which has squeezed oil and gas companies, and a strong dollar, which diminishes the value of profits earned abroad when they’re brought back home.
“So far, there’s no signal that this quarter is really a harbinger of a profit recession,” said Jeremy Zirin, head of investment strategy at UBS Wealth Management. I think that’s why the market is reacting positively today.”
The Standard & Poor’s 500 index rose 10.79 points, or 0.5 percent, to close at 2,106.63. Transocean, an operator of drilling rigs, soared 10 percent, the biggest gain in the index.
The Dow Jones industrial average rose 75.91 points, or 0.4 percent, to 18,112.61, while the Nasdaq composite added 33.73 points, or 0.7 percent, to 5,011.02.
Delta Air Lines said its quarterly profit more than tripled as passengers flew more and fuel prices plunged from a year ago. The results sent Delta’s stock up $1.12, or 3 percent, to $44.20.
After the market closed Tuesday, Intel, the world’s largest maker of computer chips, reported quarterly profits that beat analysts’ targets. Intel’s stock surged $1.34, or 4 percent, to $32.83.
Crude oil jumped $3.10 to settle at $56.39, hitting its highest price this year, after the Energy Department said that storage of crude rose by the smallest amount in three months. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.89 to close at $60.32 in London.
Major markets in Europe ended the day mixed. Germany’s DAX finished flat while France’s CAC-40 gained 0.7 percent. Britain’s FTSE 100 index of leading shares added 0.3 percent.
Minutes after being forced from the stage by a protester, Mario Draghi, the president of the European Central Bank, indicated that the bank will stick with its monthly purchases of bonds. A recent run of solid economic data fed speculation that the ECB will ease the pace of its bond-buying, aimed at spurring economic growth. His briefing came after the bank kept its main interest rate unchanged at a record low of 0.05 percent.
In Asia, Japan’s Nikkei 225 stock index slipped 0.2 percent. Hong Kong’s Hang Seng gained 0.2 percent, while the Shanghai composite index lost 1.2 percent.
Back in the U.S., Bank of America turned in a quarterly profit following a big loss a year ago as it put some of its legal troubles behind it. But revenue remained flat for its main businesses. The bank’s stock dropped 18 cents, or 1 percent, to $15.64.
Aduro Biotech more than doubled on its first day of trading, closing at $42, far above its initial offering price of $17. The 147 percent increase beat the 119 percent first-day gain for Shake Shack on Jan. 15, making it the biggest first-day pop for an IPO this year.
Precious and industrial metals traded higher. Gold rose $8.70 to settle at $1,201.30 an ounce, while silver rose 12 cents to $16.28 an ounce. Copper picked up a penny to $2.71 a pound.
In the market for U.S. government bonds, the yield on the 10-year Treasury note was unchanged at 1.90 percent.
In other trading on the New York Mercantile Exchange:
– Wholesale gasoline rose 10 cents to close at $1.936 a gallon.
– Heating oil rose 8.7 cents to close at $1.889 a gallon.
– Natural gas rose 0.8 cents to close at $2.610 per 1,000 cubic feet.