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By Wallace Witkowski and Ellie Ismailidou, MarketWatch

S&P tries for 6th closing high in 8 days as Microsoft, Morgan Stanley earnings beat forecasts

U.S. stocks on Wednesday maintained their recent rally toward new closing highs, buoyed by a surge in tech stocks after a flurry of corporate earnings beat the market's lowered expectations.

Notably, Morgan Stanley (MS) and Microsoft Corp.(MSFT) released better-than-feared earnings, boosting the broader benchmarks after disappointing quarterly results from Netflix Inc.(NFLX) on Tuesday led both the S&P 500 and the Nasdaq to finish lower.

Gains in oil futures , which erased earlier losses after the U.S. Energy Information Administration reported (http://www.marketwatch.com/story/oil-pares-losses-after-eia-reports-fall-of-23-mln-barrels-in-us-crude-supplies-2016-07-20)that domestic crude supplies declined, also helped boost risk appetite.

The S&P 500 index climbed 11 points, or 0.5% to 2,175, led by a 1.5% rise in technology stocks. At this level, the S&P 500 will have closed at a new all-time high in six out of eight sessions.Three out of the index's 10 sectors were in negative territory, with utilities stocks leading the modest losses, down 0.5%.

The Dow Jones Industrial Average rose 54 points, or 0.3% to 18,613, led by a 6.6% surge in Microsoft, which was contributing over 20 points to the Dow. The blue-chip gauge was weighed by a 1.2% drop in Walt Disney Co.(DIS). The blue-chip average is on track for its ninth day of gains, and seventh consecutive all-time closing high.

Meanwhile, the Nasdaq Composite Index advanced 58 points, or 1.1%, to 5,094, hitting its highest level this year amid the broad tech rally. The index, which has run at a loss for most of the year, is up 1.6% for 2016.

"The most important thing is that it's not all that unusual when you have a new high to get a new high," said Nicholas Colas, chief market strategist at Convergex in an interview.

"It's very infrequently that a new high collapses, you see whole strings, then one sticks out where the new high collapses -- that's the actual oddball," he said.

New stock market highs are being supported by persistently low global interest rates, continued good earnings of U.S. companies where dividends have become yield substitutes, and enough global scariness like the Brexit and the failed coup in Turkey to keep central banks on the beam of accommodative monetary policy, Colas said. Low trading volumes and a CBOE Volatility Index under 12 are also key in supporting the new highs.

In absence of U.S. economic data, earnings reports dominated the headlines. So far 14% of company's on the S&P 500 have reported quarterly results, 64% of which have beat expectations, according to S&P Global Market Intelligence.

The overall optimism and boost in risk appetite was evident in strong gains for the ultra-risky junk bonds (HYG) and a selloff in haven investments, such as Treasurys gold futures .

"Whereas international headlines threatened to disrupt markets just days ago, today it is hard to find a Brexit story or one about the attempted coup in Turkey," said James Meyer, chief investment officer at Tower Bridge Advisors, in emailed comments.

"When you have prices at all-time highs and volumes relatively low, the setup is there for a couple of good earnings reports to lift the broader market," said Mike Antonelli, equity sales trader at R.W Baird & Co.

Aggregate earnings so far in the second quarter have shown a 4.4% decline in profits year-over-year, marking a fourth straight quarter of weaker earnings, according to S&P Global Market Intelligence.

Still, in terms of how earnings affect market moves "it's all about the expectations, not the actual numbers," Antonelli said. Even though the expectation bar is set low, as more and more companies manage to beat forecasts and improve their outlook, investors are thinking that "this is the trough and going forward we will see an improvement," he added.

Movers and shakers: On Tuesday, both the S&P and the Nasdaq as the broader market retreated after disappointing quarterly results from Netflix Inc.(NFLX). The online-streaming service sank 13% for its worst percentage drop in a single day since October 2014. On Wednesday, Netflix was up 2.3%.

On a more upbeat note in the earnings season, shares of Microsoft jumped 6.7% after the software giant's earnings released late Tuesday beat analyst forecasts (http://www.marketwatch.com/story/microsoft-quarterly-profit-beats-expectations-2016-07-19). The company also said its cloud and productivity businesses posted revenue growth, even as overall sales fell.

In notable earnings on Wednesday, Morgan Stanley rose 1.5% after reporting earnings and revenue that beat Wall Street's expectations (http://www.marketwatch.com/story/morgan-stanley-profit-and-revenue-fall-2016-07-20).

The report comes after Goldman Sachs Group (http://www.marketwatch.com/story/goldman-sachs-stock-turns-lower-analyst-sees-reason-to-be-less-bullish-2016-07-19) Inc. (GS), J.P. Morgan Chase & Co (http://www.marketwatch.com/story/jp-morgan-profit-falls-but-beats-estimates-2016-07-14-114851746).(JPM) and Citigroup Inc (http://www.marketwatch.com/story/citigroup-profit-drops-but-beats-expectations-2016-07-15-8485346).(C) also all beat on earnings for the second quarter.

Oil-field-services company Halliburton Co.(HAL) shares fell 0.8% after the company said it swung to a second-quarter loss of $3.21 billion, but still beat analyst forecasts (http://www.marketwatch.com/story/halliburton-results-beat-expectations-sees-turn-in-north-america-market-2016-07-20).

Homeware-products maker Tupperware Brands Corp.(TUP) jumped 9.5% after the company beat profit views, but cut its outlook (http://www.marketwatch.com/story/tupperware-beats-profit-views-but-cuts-outlook-2016-07-20).

Intel Corp.(INTC), American Express Co.(AXP) and eBay Inc.(EBAY) are among companies reporting after the bell.

There are no Federal Reserve speakers or major economic data on tap for Wednesday.

Other markets: Asian markets closed mixed, with Japan's Nikkei 225 index breaking a six-session winning streak (http://www.marketwatch.com/story/nikkei-rally-stalls-as-asian-markets-mixed-2016-07-20).

European stocks (European%20stocks) were near a one-month high, helped by some upbeat corporate updates.

--Sara Sjolin in London contributed to this report.

(END) Dow Jones Newswires

July 20, 2016 13:37 ET (17:37 GMT)

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