Wall Street Rallies On Earnings, Data

Markets Reuters

U.S. stocks ended stronger on Wednesday as Visa's potential expansion into China and talk of a turnaround at McDonald's helped investors look beyond a mixed bag of quarterly earnings.

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All of the 10 major S&P 500 sectors rose, with the tech index gaining 1.09 percent, propelled by Visa and MasterCard.

Visa ended 4.07 percent higher at $68.01 after hitting a record high of $69.98, while MasterCard closed up 3.91 percent after China said it would open up its market to foreign firms for clearing domestic bank card transactions.

McDonald's surged 3.13 percent after it said it was working on a plan to reverse its shrinking sales.

A week ago, more than 80 percent of the S&P 500 companies to have posted their March-quarter earnings had beaten estimates. But with 121 reports now in, that number has slipped to 71.9 percent - just above the 70 percent earnings beat rate seen over the past four quarters. Many have blamed misses on revenue on a strong dollar for making their products more expensive overseas.

"We’re sorting through earnings. It’s mixed, but there’s no drastic change to the general economic recovery.” said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta.

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The Dow Jones industrial average rose 88.68 points, or 0.49 percent, to end at 18,038.27. The S&P 500 gained 10.67 points, or 0.51 percent, to 2,107.96 and the Nasdaq Composite added 21.07 points, or 0.42 percent, to 5,035.17.

The Nasdaq Composite is now just 13 points shy of its record high close, set in March 2000, that signaled the limit of the dot-com bubble. By October 2001, 70 percent of its value had evaporated.

"I do think there are valuation concerns, and some tech companies are trading at extremely high multiples," said Derek Hoyt, chief investment officer at Minneapolis-based KDV Wealth Management. "People need to be cautious about what they buy, but I don’t think the situation calls for a 70 percent decline."

Major tech earnings on tap for Thursday include Amazon.com , which trades at over 400 times earnings, as well as Microsoft and Google .

Yum Brands ended 3.95 percent higher after the restaurant operator said late on Tuesday it was recovering from a meat scare in China and expected a strong year-end finish.

After the bell, eBay was up 5 percent after it posted March-quarter earnings above estimates and said its growth was hurt by the strong dollar. Facebook Inc posted its slowest growth in quarterly revenue in two years and its stock fell 2.1 percent in extended trade.

On Wednesday, advancing issues outnumbered declining ones on the NYSE by 1,737 to 1,230, for a 1.41-to-1 ratio; on the Nasdaq, 1,483 issues rose and 1,267 fell for a 1.17-to-1 ratio favoring advancers.

The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq Composite recorded 94 new highs and 33 new lows.

About 6.0 billion shares changed hands on U.S. exchanges, below the 6.2 billion daily average for the month to date, according to BATS Global Markets.

(By Noel Randewich; Additional reporting by Tanya Agrawal; Editing by Rodrigo Campos, Nick Zieminski and Cynthia Osterman)