NEW YORK - Stocks moved sharply higher Wednesday on strong earnings from Time Warner Inc. and declining oil prices. A big upswing in tech stocks sent the Nasdaq composite index up well over 1 percent.
With three-quarters of third-quarter earnings reported, the Standard & Poor's 500 are poised to post a 14 percent year-over-year quarterly gain. Traders continue to watch earnings while they wait for details on the economic outlook from the Federal Reserve, which raised its benchmark interest rate to 4 percent Tuesday, its 12th consecutive rate hike.
"Interest rates are still rising, but for the moment, we have great corporate profits," said Charles H. Blood Jr., senior financial markets analyst at Brown Brothers Harriman & Co. "It's like a race between interest rates and profits. One day interest rates seem to win, the next day profits seem to win."
The result is a market where large-cap stocks are nearly flat for the year.
According to preliminary calculations, the Dow Jones industrial average rose 65.96, or 0.63 percent, to 10,472.73.
Broader stock indicators were higher. The Standard & Poor's 500 index rose 12.00, or 1 percent, to 1,214.76. The Nasdaq, lifted by companies including Apple Computer Inc. and Black Box Corp., rose 30.26, or 1.43 percent, to 2,144.31.
Oil futures fell. A barrel of light crude was quoted at $59.75, down 10 cents, in trading on the New York Mercantile Exchange. Oil's decline widened after the Energy Information Administration reported oil and gas reserves that were in line with analysts' exceptions.
Bonds fell, with the yield on the 10-year Treasury note rising to 4.60 percent from 4.58 percent late Tuesday. The U.S. dollar rose against major currencies in European trading. Gold prices rose.
Despite the day's gains, money managers remain wary of stocks. The S&P 500 is barely positive for the year. Merrill Lynch said in a strategy note that its "sell side indicator," a survey of Wall Street strategists' recommended asset allocations, shows the number of strategists who are moving more money into cash rose in October.
"Cash still appears to be the only asset class with a near-certain increasing and competitive expected return," Merrill Lynch said in the note.
Near the top of investors list of worries is how long the Federal Reserve will continue to raise interest rates.
"It's been a little difficult to get any read as to what their thinking may be," said Jim Dunigan, chief investment officer for PNC Advisors.
Time Warner Inc., the world's largest media company, reported an 80 percent rise in third-quarter earnings, more than doubled its stock repurchase program and confirmed it was in talks to sell part of its America Online unit. Stock in the company, whose properties include the Warner Bros. studio, HBO, CNN, a major cable TV company and Time magazine, rose 33 cents to $17.90.
Apple rose $2.45 to $59.95 and computer networking company Black Box rose $4.90 to $45.10 after its second quarter results topped forecasts.
Insurer Cigna fell $7.18 to $110.37 after its profits declined 16 percent from a year-ago period that benefited from higher one-time gains. The company also said it received a subpoena in October from the U.S. Attorney's Office for the Southern District of California, seeking information about a disability and accident insurance broker. Cigna gave no further information on the subpoena.
Symantec Corp. stock fell $4.63 to $19.37 the day after the security-software maker cut its financial forecast and announced the surprise retirement of its chief financial officer.
Struggling medical device maker Guidant Corp. fell $2.70 to $60.40 after Johnson & Johnson said it might cancel its plans to buy the company. Since June, Guidant has recalled or issued warnings about 88,000 heart defibrillators and almost 200,000 pacemakers because of reported malfunctions. Johnson & Johnson, which makes medicines, skin and baby care products, fell 60 cents to $61.30.
The Russell 2000 index of smaller companies rose 14.03, or 2.18 percent, to 657.05.
Advancing issues led decliners by almost 3 to 1 on the New York Stock Exchange, where volume came to 1.79 billion shares, down from 1.90 billion at the same time Tuesday.
Overseas, Japan's Nikkei gained 0.19 percent, hitting a four-year high on healthy earnings reports. In the market's heaviest trading day ever, investors snapped up construction, steel and shipping shares. The dollar rose to a 25-month high against the yen, a boon for Japan's exporters.
Britain's FTSE 100 gained 0.27 percent, Germany's DAX index rose 0.66 percent, and France's CAC-40 fell 0.12 percent.