By Saumya Vaishampayan
U.S. stocks ended higher Wednesday, propelling the Russell 2000
index of small-company shares to a record high.
The Dow Jones Industrial Average advanced 75.91 points, or 0.4%,
to 18112.61. The S&P 500 rose 10.79 points, or 0.5%, to
2106.63, and the Nasdaq Composite Index gained 33.73 points, or
0.7%, to 5011.02.
The Russell 2000 index rose 10 points, or 0.8%, to 1275.35, a
record close.
Traders said there was no one reason for the move higher,
pointing to higher oil prices, a handful of earnings reports and a
weaker dollar. Around 7.1 billion shares traded Wednesday, higher
than the 2015 average of 6.7 billion shares.
Energy stocks in the S&P 500 rose 2.3%, notching the biggest
sector gain as crude-oil futures surged 5.8% to $56.39 a barrel.
Exxon Mobil Corp. and Chevron Corp. added 20 points to the Dow's
overall gain.
Investors continued to focus on first-quarter earnings. A strong
U.S. dollar is expected to weigh on profits at companies that do
significant business overseas, while low oil prices will likely
continue to drag down profits at energy companies. Including
results from 37 companies, S&P 500 earnings are on track to
fall 5% from a year ago, according to FactSet.
"The slowdown in growth, the fall in energy prices, the weather
and the West Coast port strike all have investors somewhat cautious
as we go through earnings season," said Alan Gayle, director of
asset allocation at RidgeWorth Investments, which has $43.5 billion
under management.
In earnings news, Delta Air Lines Inc. said earnings in its
March quarter more than tripled, beating analyst expectations as
the company benefited from lower fuel prices. The airline said it
would reduce international capacity by 3% as it deals with the
strong dollar. Shares rose 2.6%.
Intel Corp. shares rose 4.3%, contributing about nine points to
the Dow's overall gain. The chip maker late Tuesday reported a 3%
rise in net income on overall revenue that was flat compared with
the year-ago period. Intel said last month that revenue would
suffer in the first quarter due to sagging sales of personal
computers. A bright spot was the data center group, which posted a
19% jump in revenue.
Traders said shares of semiconductor stocks rose along with
Intel. The Market Vectors Semiconductor ETF rose 1.9%.
Bank of America Corp. said Wednesday it swung to a first-quarter
profit. Still, results missed analyst expectations, pushing shares
down 1.1%.
Updates on monetary policy in Europe also added to the positive
tone for U.S. stocks. The European Central Bank kept rates
unchanged, as expected, leaving its main lending rate at a record
low. ECB President Mario Draghi emphasized that the central bank
remains committed to its bond-buying program. France's CAC 40 rose
0.7% and Germany's DAX added less than 0.1%.
"Central banks across the board still look like they're going to
stay very accommodative and keep interest rates low for a long
time, which equity investors like," said Chris Gaffney, president
of EverBank World Markets.
The euro rose slightly to $1.0685 from $1.0656 on Tuesday. For
the year, the euro has fallen nearly 12% against the dollar.
The strength of the U.S. dollar against the euro could be a boon
for European multinationals, said Mr. Gayle of RidgeWorth
Investments. "The combination of quantitative easing by the ECB and
the weaker euro has been the catalyst that I've been looking for to
move more money overseas, " he said.
Even with the jump in oil prices Wednesday, they remain down
nearly 50% since last June. Paul Karos, senior portfolio manager at
Whitebox Mutual Funds, which manages about $900 million, said he
bought airline stocks earlier this year as they should benefit from
low oil prices. "They have the clearest cost benefit [from low oil
prices] of anybody in transports, " he said. Lower oil prices are
"a huge windfall for the industry," he added.
In other markets, gold futures added 0.7% to $1201.50 an
ounce.
The yield on the 10-year Treasury note was at 1.900%, compared
with 1.904% on Tuesday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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