NEW YORK: U.S. stocks advanced Wednesday, snapping a two-day decline for the Standard & Poor’s 500 index, amid investors’ optimism about fourth-quarter corporate earnings.
Alcoa Inc., which reported better-than-estimated sales, fell 0.2 percent after rallying as much as 2.5 percent earlier in Wednesday trading.
Seagate Technology Plc jumped 6.6 percent as revenue topped an earlier forecast. Herbalife Ltd. added 4.2 percent after Daniel Loeb’s Third Point LLC took an 8.2 percent stake in the company. Bank of America Corp. slid 4.6 percent after Credit Suisse Group AG cut its recommendation for the lender.
The S&P 500 rose 0.3 percent to 1,461.02. The Dow Jones industrial average added 61.66 points, or 0.5 percent, to 13,390.51.
“Alcoa’s report got us off to a good start [for fourth quarter financial reports],” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Ill.-based Oakbrook Investments LLC. “Still, earnings growth is going to be a little bit harder to come by. If we see some good results from bellwether companies, that will definitely give a lift to the market.”
Fourth-quarter profits at S&P 500 companies probably increased 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009.
Six out of 10 groups in the S&P 500 rose Wednesday as health-care and industrial shares had the biggest gains. Telephone and utility companies retreated the most. The Dow Jones Transportation Average climbed 1 percent to the highest level since July 2011. An S&P index of home builders advanced 0.9 percent to the highest since August 2007.
The Chicago Board Options Exchange Volatility Index rose 1.4 percent to 13.81. The index earlier touched 13.22, the lowest intraday level since 2007, and dropped 40 percent over the previous six days.
“People are just looking at these low levels as opportunity to buy portfolio protection,” said Jonathan Krinsky of Miller Tabak & Co.