Oil drop boosts stocks

Stocks also got a boost from falling crude oil futures after the Energy Department reported larger-than-expected inventories of oil, gasoline and heating oil. A barrel of light crude was quoted at $62.41, down $1.10, on the New York Mercantile Exchange.

Yet earnings, and the Fed report were measures of the economy’s status weeks and months ago. While investors were eager to buy after October’s poor performance, they remain nervous about rising inflation and consumer spending for the fourth quarter and beyond — leading analysts to wonder whether Wednesday’s rally can be sustained.

"There are some signs on the wall here that we may have hit the bottom of this market, and we could be ready to move up,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati. "The big question, though, is how far we move up and how long it lasts.”

The Dow rose 128.87, or 1.25 percent, to 10,414.13.

Broader stock indicators also moved higher. The Standard & Poor’s 500 index climbed 17.62, or 1.5 percent, to 1,195.76, while the tech-focused Nasdaq composite index added 35.24, or 1.71 percent, to 2,091.24.

Bonds built on the previous session’s gains, with the yield on the 10-year Treasury note falling to 4.46 percent from 4.47 percent late Tuesday. The dollar was lower against most major currencies, while gold prices also fell.

The Commerce Department said new housing construction rose to an annualized rate of 2.108 million units, far greater than the 1.975 million economists expected — a possible sign of a pickup in the cooling housing market.

In earnings news, Intel’s revenues were below Wall Street’s forecasts despite strong laptop computer sales. But it was the fourth-quarter outlook, which included warnings of slower sales, that caused nervous investors to sell off the stock, which was down sharply in early trading but finished the session down just 3 cents at $23.69.

"Intel signaled that earnings growth is slowing, but we expected that,” said Jack Ablin, chief investment officer at Harris Private Bank. "The real question is how much it’s going to slow, what companies are going to get hit, which one’s aren’t. We’ll know more when more earnings reports come in.”

The disappointment over Intel was mitigated by other positive earnings reports in the technology sector. Yahoo Inc. jumped $2.21 to $35.91 after beating analysts’ profit expectations by a penny per share on a 47 percent jump in sales, while Motorola Inc. climbed 85 cents to $21.02 on news that its quarterly profits tripled.

Dow industrial Altria Group Inc. gained $1.37 to $73.85 after reporting a 9 percent increase in profits. The conglomerate also said its Philip Morris USA division now boasts more than 50 percent of the cigarette market.

Fellow Dow component JPMorgan Chase & Co. took advantage of a strong stock market in the third quarter, which boosted its quarterly earnings 78 percent from a year ago. JPMorgan Chase, which also announced that Jamie Dimon will take over as chief executive six months early, added 96 cents to $34.73.<