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U.S. stocks enjoyed solid gains Wednesday morning as enthusiasm for the beginning of earnings season helped put the markets on pace to end their two-day retreat.
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As of 10:38 a.m. ET, Dow Jones Industrial Average climbed 74.47 points, or 0.56%, to 13404.00, S&P 500 advanced 6.31 points, or 0.43%, to 1463.46 and Nasdaq Composite rose 16.76 points, or 0.54%, to 3108.48.
With enthusiasm over the New Year's fiscal cliff deal fading, the markets have struggled to keep the positive momentum going in the last couple of sessions. Indeed, the broad S&P 500 has slipped 0.64% over the past two days as traders have braced for what could be a hectic earnings season.
Starting earnings season on a mostly positive note, aluminum giant Alcoa (NYSE:AA) posted fourth-quarter earnings of 6 cents a share, matching Wall Street’s expectations. Revenues of $5.9 billion topped analysts forecasts of $5.6 billion. The Dow component also said it sees global aluminum demand growth of 7% this year, up one percentage point from 2012. Yet Alcoa's shares traded flat to slightly higher Wednesday.
Still, market participants have generally subdued expectations for the fourth quarter. Dan Greenhaus, chief global strategist at BTIG, wrote in an email that Wall Street is expecting 3% growth for S&P 500 companies, down sharply from 10% at the end of September. He said to pay especially close attention to technology names -- like heavyweight Apple -- as analysts have had to pare back expectations for the sector.
Elsewhere, German industrial production data released on Wednesday came in far short of expectations. The factory sector in Europe's biggest economy revved up by 0.2% on a month-to-month basis in November, compared to forecasts of 1%. The report highlights the extent to which the eurozone's debt woes have begun infecting even the continent's most robust economies.
The U.S. data docket is bare on the day, but will pick up during the final two days of the week. On Thursday, traders will get a look at weekly jobless claims and then trade will be in focus on Friday.
In corporate news, Boeing (NYSE:BA) rallied 2% as traders bet safety worries regarding its highly-lauded 787 Dreamliner may be overblown. "Sell the flap, buy the weakness," Oppenheimer advised investors.
Morgan Stanley (NYSE:MS) plans to cut around 1,500 workers, representing about 6% of the company’s workforce, sources told FOX Business’s Charlie Gasparino.
Goldman Sachs (NYSE:GS) also revealed that it will provide daily pricing of U.S. money market funds starting immediately in a move it believes will increase transparency. According to Goldman, current regulations compel companies to report on a monthly basis with a 60-day lag.
PNC Financial (NYSE:PNC) disclosed more than $300 million in mortgage-related costs, but said it still plans to beat fourth-quarter earnings estimates.
Herbalife (NYSE:HLF) is said to be mulling a potential lawsuit against Activist investor William Ackman. His allegations that the nutrition company is a "pyramid scheme" sent the stock plunging late last year, although it rallied on Wednesday after Daniel Loeb's Third Point disclosed an 8.2% passive stake in Herbalife by acquiring 8.9 million shares.
Oil futures ticked higher. The benchmark U.S. contract gained 5 cents, or 0.05%, to $93.20 a barrel. Wholesale New York Harbor gasoline slumped 0.66% to $2.776 a gallon. In metals, gold fell $6.10, or 0.37%, to $1,656.10 a troy ounce.
The Euro Stoxx 50 rose 0.52% to 2705.43, the English FTSE 100 climbed 0.86% to 6106.53 and the German DAX edged up by 0.37% to 7723.02.
In Asia, the Japanese Nikkei 225 jumped 0.67% to 10579 and the Chinese Hang Seng advanced 0.46% to 23218.