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The Dow posted modest gains after Boeing and Caterpillar revealed stellar quarterly results, but the broader S&P 500 and Nasdaq lagged far behind.
As of 3:18 p.m. ET, the Dow Jones Industrial Average rose 79.3 points, or 0.63%, to 12696, the S&P 500 gained 1.2 points, or 0.09%, to 1340 and the Nasdaq Composite fell 4.7 points, or 0.16%, to 2858.
The Dow has shed 326 points, or 2.5%, over the past three trading sessions that have been driven by weak data and mounting concerns about Europe's debt crisis. However, strong quarterly results and full-year outlooks from blue-chip heavyweights Caterpillar (NYSE:CAT) and Boeing (NYSE:BA) gave sentiment a boost on Wednesday.
Caterpillar posted second-quarter earnings of $2.54 a share on revenues of $17.37 billion, topping the Street’s forecast of $2.28 on $17.11 billion. The world’s biggest heavy machinery maker also raised its full-year EPS outlook by a dime to $9.60, which is above the consensus estimate of $9.54.
Boeing unveiled second-quarter profits of $1.27 a share on sales of $20 billion, besting analysts’ estimates of $1.12 on $19.37 billion. The blue-chip aerospace giant also lifted its full-year guidance to between $4.40 and $4.60 a share.
Technology juggernaut Apple (NASDAQ:AAPL) weighed on the Nasdaq after it reported disappointing quarterly profits and revenues on weak iPhone sales. The world's biggest company by market value saw its stock drop some 5%.
A disappointing report on the U.S. housing market also proved to be a drag. Sales of new U.S. single-family homes fell 8.4% in June from May, the biggest decline since February 2011, to a 350,000-unit annualized rate, the Commerce Department said. The results came in below estimates of a 370,000-unit rate and marked the lowest rate since January 2012.
Elsewhere, market participants found solace in commentary from Ewald Nowotny, a member of the European Central Bank's governing council, suggesting the central bank may be willing to provide the European Stability Mechanism, the eurozone's permanent bailout fund, a banking license. Such a move could prove important because it would provide the ESM with direct access to ECB funding. Right now, the bloc's two rescue funds are capitalized by member states.
The euro got a boost on the news, recently jumping 0.72% to $1.2148. However, many analysts remained skeptical.
"We think this appeared to be said in a broad context of discussing potential options, rather than Nowotny arguing in favour of an ESM banking licence," analysts at Nomura wrote in a note to clients. "In our view granting the ESM a banking licence ... would be best viewed as a minor palliative rather than a crisis solution."
Oil futures edged higher. The benchmark contract traded in New York rose 47 cents, or 0.53%, to $88.97 a barrel. Wholesale New York Harbor gasoline slid 1.1% to $2.793 a gallon.
In metals, gold jumped $31.90, or 2%, to $1,613 a troy ounce.
The Euro Stoxx 50 rose 0.35% to 2159, the English FTSE 100 fell 0.02% to 5498 and the German DAX climbed 0.25% to 6407.