NEW YORK (AP) — A new sign of recovery in the housing market and strong corporate earnings sent stocks higher for a second day.
The Dow Jones industrial average rose 103.16 points, or 0.8 percent, to 12,908.70 on Wednesday, a strong showing for what has been a mediocre July so far. The index has risen only four times in the last 12 trading days.
"The market expects bad news, so when it doesn't get it, it rises," said John Manley, chief equity strategist at Wells Fargo Advantage Funds. "Earnings haven't been disastrous for the quarter."
A big gain by Intel after it posted a strong earnings report drove up technology stocks, especially other chip makers. Those companies, plus industrials, were responsible for much of the market's gains. The Nasdaq composite climbed 32.56 points, or 1.1 percent, to 2,942.60.
The government reported that builders broke ground last month on the most new homes and apartments in nearly four years. The 6.9 percent jump brought the number of housing starts to the highest since October 2008. The news came a day after a gauge of confidence among U.S. homebuilders jumped to the highest level in five years.
The Standard & Poor's 500 index rose 9.11 points, or 0.7 percent, to 1,372.78. Amphenol jumped nearly 15 percent, the most in the index, after the maker of electronic cables and connectors reported second-quarter earnings that were higher than analysts were expecting. Its stock rose $7.58 to $58.94.
For several weeks, big companies have talked down prospects for big jumps in earnings, and Wall Street analysts have slashed their forecasts in response. At the start of the earnings season last week, they said earnings for companies in the S&P 500 would likely fall 2 percent, according to S&P Capital IQ.
Earnings are still expected to fall, marking the first quarterly decline in nearly three years, but several companies have delivered pleasant surprises nonetheless. Honeywell International, a big technology and manufacturing company, reported an 11 percent increase in second-quarter income Wednesday, more than Wall Street was expecting, thanks to higher demand for its products. Honeywell also raised its forecast for full-year profits. Its stock jumped $3.64, or 7 percent, to $58.18.
Of the 65 companies in the S&P 500 to report earnings so far, 43 have beat estimates, or 66 percent, according to S&P Capital IQ. That is slightly higher than the 62 percent long-term average.
"Many of the risks — an anemic European economy, a slowdown in Asia — have been factored into earnings expectations," said Talley Leger, investment strategist at Macro Vision Research, an investment consulting firm. "That's why we're seeing positive surprises."
Other earnings reports disappointed. Bank of America reported income that beat most analysts' expectations for the second quarter, but its revenue fell short. The stock fell 39 cents, or nearly 5 percent, to $6.59. Profit declined for PNC Financial Services Group and the investment manager BlackRock, sending both stocks down more than 0.5 percent.
Among the gainers Wednesday was Intel, which rose 83 cents, or 3 percent, at $26.21. Investors also piled into Vivus Inc., pushing its stock up nearly 10 percent, after the drug maker announced approval from regulators to sell a new weight-loss pill. Doctors consider the pill, Qsymia, the most effective of a new generation of anti-obesity drugs. The company plans to start selling it by the end of the year.
Madison Square Garden's stock lost 1 percent after the owner of the New York Knicks NBA team confirmed that it was losing star player Jeremy Lin to the Houston Rockets. The Knicks said they wouldn't match a three-year, $25 million offer for the player. MSG's stock fell 36 cents to $35.45.
So far this year, the Dow is up 5.7 percent, but has mostly fallen this month. Thanks to Wednesday's gain, it's back in the black for July, but barely — up 0.2 percent.
After the market closed, a few companies reporting second-quarter results added to the somewhat positive earnings picture.
Ebay said net income more than doubled, and its stock jumped 6 percent in after-hours trading. IBM, a tech bellwether, reported earnings rose 6 percent, beating analyst estimates. Its stock rose 3 percent in extended trading.
Yum Brands, the owner of Taco Bell, KFC and Pizza Hut, fell 2 percent after it reported a rare profit decline in its key China market.
In addition to housing news, the Federal Reserve said Wednesday that its survey of the economy across the country showed modest expansion in June and early July, but that growth and hiring slowed in several regions.
In his second day of testimony before Congress, Federal Reserve Chairman Ben Bernanke did not signal any new stimulus is imminent, though he did say the Fed was looking at "ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market."
Treasury prices rose slightly as demand for low-risk assets remained strong. The yield on the benchmark 10-year Treasury note was flat at 1.50 percent. Germany auctioned $6.14 billion in two-year treasury notes Wednesday with an average interest rate, or yield, of minus 0.06 percent.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 3.6 billion shares.