April 14, 2010 / 1:12 AM / 9 years ago

S&P tops 1,200 on earnings boost

NEW YORK (Reuters) - U.S. stocks notched a fifth straight day of gains on Wednesday as stronger-than-expected corporate results and March retail sales pushed the S&P 500 past 1,200 for the first time in 18 months.

Traders work on the floor of the New York Stock Exchange, April 12, 2010. REUTERS/Brendan McDermid

Dow components Intel Corp (INTC.O) and JPMorgan Chase & Co (JPM.N) paced the market after both posted better-than-expected results.

JPMorgan was the top percentage gainer on the Dow, up 4 percent to $47.73, followed by Bank of America Corp (BAC.N), which was set to report results on Friday and rose 3.9 percent to $19.40. Intel climbed 3.3 percent to $23.52.

“There were fairly high expectations for both JPMorgan and Intel, so these beats show how much things are improving,” said Douglas Peta, an independent market strategist in New York.

More stocks hit a 52-week high on the New York Stock Exchange than on any day since the end of December 2003. The Nasdaq recorded its greatest number of 52-week highs since January 2004.

The Dow Jones industrial average .DJI was up 103.69 points, or 0.94 percent, at 11,123.11. The Standard & Poor's 500 Index .SPX was up 13.35 points, or 1.12 percent, at 1,210.65. The Nasdaq Composite Index .IXIC was up 38.87 points, or 1.58 percent, at 2,504.86.

The strong earnings from JPMorgan and Intel and good trading volume boosted investor sentiment after a revenue disappointment from Dow component Alcoa Inc (AA.N), which kicked off the first-quarter earnings season on Monday.

While the large number of 52-week highs suggest broad-based buying, momentum indicators also suggest the markets could be overbought.

Also boosting sentiment were March retail sales, which rose 1.6 percent, the Commerce Department reported, beating expectations for a 1.2 percent increase. The S&P retail index .RLX climbed 1.2 percent.

“Everyone who said that the consumer was dead clearly has to reconsider the obituary,” Peta said.

Financial and technology sectors led gains on the broad S&P 500, which broke above 1,200 for the first time since September 2008 when Lehman Brothers collapsed.

The KBW Banks index .BKX surged 3.4 percent while Citigroup Inc (C.N) gained 6.7 percent to $4.93 and was the most actively traded stock on the New York Stock Exchange.

JPMorgan had “raised the bar” for other banks, Peta said, adding that if Bank of America didn’t “display the same strength as JPMorgan, it is liable to give back today’s gains.”

After the market’s close, Yum Brands Inc (YUM.N), which operates Taco Bell, Pizza Hut and other restaurant chains, reported adjusted first-quarter earnings that beat expectations, sending the stock up 2.9 percent to $42.89 in extended trading.

Earnings are also due this week from Google (GOOG.O), which was up 0.4 percent to $589, and General Electric (GE.N), which rose 2.1 percent to $19.35. GE is up more than 4 percent so far this week.

U.S. economic activity strengthened in most regions in March and early April, except for St. Louis where plans to close several plants were announced, the Federal Reserve said in its Beige Book.

Energy stocks advanced after a surprise fall in U.S. crude inventories, a positive sign for demand that sent May crude futures up 2.3 percent to $85.99 per barrel. ConocoPhillips (COP.N) gained 2.2 percent to $56.89.

A note from analysts at Jefferies Equity Derivatives said the gap between implied volatility and realized volatility suggests investors are bracing for a more volatile market. The Volatility Index .VIX, down 2.8 percent, is at its lowest since 2007.

About 10.24 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above last year’s estimated daily average of 9.65 billion.

Roughly three stocks rose for every one that fell on the New York Stock Exchange, while on the Nasdaq, three stocks rose for everyone that fell.

Reporting by Ryan Vlastelica; Editing by Kenneth Barry

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