NEW YORK (AP) — Another choppy day on Wall Street ended with stocks broadly higher on hopes of new stimulus measures for Europe's weak economy and a sharp rise in oil prices.
Stocks flitted between gains and losses at the open of trading Wednesday, then rose on media reports that new stimulus measures by the European Central Bank will be as large as many investors had hoped. The bank is expected on Thursday to unveil a massive round of government bond buying, a program known as quantitative easing.
All 10 sectors of the Standard and Poor's 500 stock index rose. A gain in oil prices helped push the energy sector up 1.8 percent, the biggest gainer.
The bumpy market is not surprising after big stock gains last year and the year before, said Phil Orlando, chief equity strategist at Federated Investments.
"Investors are worried the gains can't possibly last another year," he said. "Investors are really nervous. "
Investors also weighed a batch of corporate earnings reports. Netflix surged 17 percent on a jump in fourth-quarter profits. But IBM's results disappointed and its stock dropped 3 percent.
Europe is facing anemic growth, high unemployment and falling prices. To combat this, many investors are expecting the European Central Bank to buy 500 billion euros ($580 billion) of various government bonds per year.
"All eyes are on the Mario Draghi," said Anastasia Amoroso, global market strategist at J.P. Morgan Asset Management, referring to the ECB president. "This is the most anticipated event of the week."
The S&P 500 rose 9.57 points, or 0.5 percent, to close at 2,032.12. It was third straight day of gains for the index, a first in the new year.
The Dow Jones industrial average climbed 39.05 points, or 0.2 percent, to 17,554.28. The Nasdaq gained 12.58 points, or 0.3 percent, to 4,667.42.
Reporting of fourth-quarter corporate earnings is in full swing. When all S&P 500 companies have reported, earnings per share are expected to edge up 0.5 percent, the smallest quarterly gain in two years, according to FactSet. A slump in oil, down more than 50 percent over the last seven months, is largely to blame. EPS at energy companies are expected to fall 22 percent from a year earlier.
"This earnings season is not as much of a slam dunk as in the past," said JP Morgan's Amoroso. "In prior seasons we had all sectors contributing (to gains), but energy and some industrial companies aren't now. There's a lot of uncertainty."
In economic news, construction of new homes rebounded in December, helping to push activity for the entire year to the highest level since the peak of the housing boom nine years ago. Homebuilder D.R. Horton rose 2 percent.
The Commerce Department report showed that builders started construction at a seasonally adjusted annual rate of 1.09 million in December, an increase of 4.4 percent from November.
Among stocks making big moves:
— Netflix jumped $60.48 to $409.28. In a report late Tuesday, the company said it added 4.3 million subscribers in the final three months of 2014 and that per-share earnings rose 72 percent from a year earlier, a record gain.
— UnitedHealth rose $3.70, or 3.5 percent, to $109.32 following quarterly earnings that topped expectations. The nation's largest health insurer said last month that it expected double-digit earnings growth in 2015.
— IBM dropped $4.86 to $152.09 after reporting an 11 percent drop in fourth-quarter profit. Its outlook for the coming year also disappointed investors as business customers continued to move away from buying big mainframe computers and traditional software installed on their own systems.
In oil markets, prices rose on signs that drillers are cutting back and on the expected European stimulus. Benchmark U.S. crude rose $1.31 to close at $47.78 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.04 to close at $49.03 in London.
The dollar weakened to 117.85 yen from 118.64 yen the previous day. The euro edged up to $1.1607 from $1.1548.
Gold fell 50 cents to $1,293.70 an ounce. Silver rose 23 cents to $18.19 an ounce. Copper edged up nearly 2 cents to $2.61 a pound.
In other futures trading on the NYMEX:
— Wholesale gasoline rose 1.3 cents to close at $1.326 a gallon.
— Heating oil rose 1.9 cents to close at $1.646 a gallon.
— Natural gas rose 14.3 cents to close at $2.974 per 1,000 cubic feet.