By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

[Editor's note: A prior version of this story contained an incorrect Tuesday close for the Dow industrials, and also gave an incorrect reporting day for Citigroup Inc.]

NEW YORK (MarketWatch) -- The Dow Jones Industrial Average closed at a record level on Wednesday for the 15th time this year, as better-than-expected corporate earnings and deal talk lifted broader markets.

The Federal Reserve's Beige Book, which said that economic conditions and labor markets showed improvement across the country into early July, gave stocks a late lift.

The S&P 500 (SPX) closed 8.25 points, or 0.4%, higher at the preliminary 1,981.53. The Dow Jones Industrial Average (DJI) added 77.33 points, or 0.5%, to 17,138.01.

The Nasdaq Composite (RIXF) gained 9.58 points, or 0.2%, to 4,425.97.

But while S&P component Time Warner Inc. surged on news that it had rejected a bid from 21st Century Fox Inc., biotech and Internet stocks sold off for the second day, after a report from the Federal Reserve on Tuesday raised concerns about their valuations. The iShares Nasdaq Biotechnology ETF (IBB) fell 1.6%, while the Global X Social Media Index ETF (SOCL) gave up 0.4%.

Federal Reserve Chairwoman Janet Yellen concluded her two-day appearance testifying on Capitol Hill. In her comments, she stressed a softer line on stock valuations, saying the Fed doesn't have a target for equity values. The central bank instead looks to see if valuations are outside historical norms.

"In that sense, I am not seeing alarming warning signals," she said Wednesday. Read the recap of Yellen's testimony on this live blog.

Also read: Jim Cramer is wrong -- the Fed should talk valuations

But most of investors' attention was on earnings and M&A news.

Time Warner Inc. (TWX) shares jumped 17% as the media company confirmed it had rejected an $80 billion offer from 21st Century Fox (NWS).

"The news about Time Warner's rejection of a takeover bid by 21st Century Fox signals that corporations are healthy and see value in assets that the public markets do not see. And if companies deliver on 5% earnings growth estimate, then current multiples and prices on the S&P 500 are justified," said Joe Peta, managing director at Novus, a financial technology company.

Also read: Fox's bid for Time Warner may be a buy signal for Viacom

Intel Corp.(INTC) jumped 9.3% after the technology maker reported market-pleasing results late Tuesday, while disappointment over Yahoo Inc.'s(YHOO) results left those shares down 5%.

HCA Holdings Inc.(HCA) leapt 10% as the hospital operator raised its earnings guidance for the second quarter and full year. For more on today's movers, read our Mover and Shakers column.

Online-auction provider eBay Inc.(EBAY) reports after the close of markets on Wednesday.

European stocks, commodities rise

Across other markets, Hong Kong's Hang Seng closed at a one-week high. China's economic growth rate hit 7.5% in the April-June quarter. While that topped expectations, it still triggered discussion about whether the government will offer up more stimulus.

European stocks were boosted by that Chinese data. Crude oil futures (CLQ4) bounced back from two-month lows, adding to gains after a government supply report showed a larger-than-expected drop in inventories. Gold futures (GCQ4) inched fractionally higher after a three-day skid, yet stayed below $1,300 an ounce. The dollar (DXY) pushed higher.

More must-reads from MarketWatch:

There's a big hole in the bull case for stocks

9 reasons Apple's stock price will keep rising

Delamaide on where the right and left agree on Obama

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