US STOCKS-Wall St advances after strong bank results and data

Wed Jan 15, 2014 3:00pm EST

* Bank of America shares jump after earnings

* Empire State manufacturing index, PPI increase

* Fastenal shares plunge after earnings miss expectations

* Dow up 0.8 pct, S&P 500 up 0.6 pct, Nasdaq up 0.8 pct

By Ryan Vlastelica

NEW YORK, Jan 15 (Reuters) - U.S. stocks rose on Wednesday, with the S&P 500 climbing to an all-time high after strong earnings from Bank of America and data signaled that the economy is improving.

Bank of America Corp climbed 2.5 percent to $17.19 as one of the biggest boosts to the S&P after the second-largest U.S. bank said its quarterly profit surged by nearly $3 billion on an increase in revenue.

The report comes a day after both JPMorgan Chase & Co and Wells Fargo & Co also posted better-than-expected earnings, though Wells Fargo's mortgage lending slowed to the lowest level in five years.

"So far so good with bank earnings this season, and it is very positive that we're seeing significant declines in foreclosures, which is very positive for the economy," said David Kelly, chief global strategist for JPMorgan Funds in New York.

In the latest economic data, the seasonally adjusted Producer Price Index rose 0.4 percent last month, the biggest increase since June, although inflation pressures remained benign. The Federal Reserve Bank of New York's "Empire State" index of general business conditions climbed to its highest level in 20 months.

The data reassured investors that the economy is able to stand on its own even as the Federal Reserve begins to slow its massive stimulus programs, which contributed to huge equity gains in 2013. Wall Street's rally on Wednesday erased some of 2014's early weakness, putting major indexes near break-even levels for the year.

In its latest Beige Book report on business activity, the Fed said the economy grew at a moderate pace from late November through the end of 2013, with some regions of the country expecting a pickup in growth.

"The general trend of economic numbers is pretty positive, and helping to get people over the shock of the recent weak payroll report," said Kelly, who helps oversee $400 billion in assets. "An improving economy is a trend of 2014, and that will be good for equities throughout the year."

The Dow Jones industrial average was up 122.95 points, or 0.75 percent, at 16,496.81. The Standard & Poor's 500 Index was up 10.23 points, or 0.56 percent, at 1,849.11. The Nasdaq Composite Index was up 31.88 points, or 0.76 percent, at 4,214.89.

As its session peak, the S&P 500 climbed to 1,850.84, a record intraday high for the benchmark index.

Trading will probably be driven by earnings as the season continues. With only 5 percent of the S&P 500 having reported results so far, 52 percent of companies have topped earnings expectations, according to Thomson Reuters data, a rate that is below the historical average of 63 percent.

Tesla Motors Inc rose 3.7 percent to $167.20 a day after the electric car maker said that deliveries of its Model S sedan in the fourth quarter sharply exceeded what the company had forecast.

SolarCity Corp gained 4.5 percent to $68.48 after the top U.S. solar installer unveiled a plan to allow investors, including individuals, to invest in its rooftop solar systems.

Shares of Chelsea Therapeutics soared after an advisory panel to the U.S. Food and Drug Administration concluded on Tuesday that the company's drug to treat a rare form of low blood pressure is effective enough to warrant regulatory approval. The stock jumped 92.6 percent to $4.43.

On the downside, Fastenal Co slid 5.1 percent to $45.73 as the S&P 500's biggest decliner after the industrial and construction supply company reported fourth-quarter earnings below expectations.

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