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Stocks surge on strong earnings; Dow hits highest level since mid-2008 [Updated]

Robust first-quarter earnings reports and another drop in the dollar have set the bulls loose again on Wall Street.

The Dow Jones industrial average was up 179 points, or 1.5%, to 12,446 at about 11 a.m. PDT, its highest level since June 2008. That surpasses the recent closing high of 12,426 reached on April 6.

[Updated at 1:10 p.m.: The Dow closed up 186.79 points, or 1.5%, to 12,453.54.]

The broader market also was sharply higher, though no other major indexes have yet topped their recent peaks. The Standard & Poor’s 500 index, up 16.77 points, or 1.3%, to 1,329.39, remains 1% below its multiyear closing high of 1,343.01 reached on Feb. 18 -- just before the market swooned on worries about surging oil prices.

Intel Strong rallies overnight in Asian and European stocks, which bounced back after recent pullbacks, set a good tone for the U.S. market.

Stocks jumped at the opening bell, led by chip giant Intel Corp., which late Tuesday reported quarterly results that blew away expectations amid strong business purchases of personal computers. Intel shares were up $1.26, or 6.4%, to $21.13.

Another Dow-index member, conglomerate United Technologies Corp., rose $3.49, or 4.2%, to $85.85 after its quarterly earnings beat estimates and the company raised its full-year profit forecast.

Also, medical products titan Johnson & Johnson rallied 2.7%, extending Tuesday’s 3.7% gain after the company’s quarterly results topped estimates.

Another critical earnings report was due after the closing bell: Apple Inc. will report results for its most recent quarter.

Fresh weakness in the dollar also was helping to buoy stocks Wednesday because of the potential boost a weakened greenback can give U.S. exporters. The DXY index, which tracks the dollar’s value against six other major currencies, was down nearly 0.8% to 74.44, its lowest level since December 2009.

The falling dollar also is drawing buyers to commodities, which get cheaper for foreign investors as the buck declines. Near-term crude oil futures in New York were up $3.17 to $111.45 a barrel, nearing the recent peak of $112.79 reached April 8. And gold futures topped $1,500 an ounce before falling back to close at $1,498.30, up $3.80.

This is one of those days when there seems to be enough money around to push all sorts of assets higher. Market bulls say the underlying assumption stoked by corporate earnings reports is that the economic expansion remains on track.

Skeptics, however, say continuing weak trading volume in stocks suggests that there isn't a lot of fresh cash coming into the market at these levels.

"What you've got is a sellers' strike," said Joe Saluzzi, a partner at Themis Trading in Chatham, N.J. Investors who own stocks are reluctant to bail out given the lack of alternatives, and because of that it's easier for modest buying to push prices up quickly, he said.

-- Tom Petruno

Photo: Outside Intel's headquarters in Santa Clara, Calif. Credit: Tony Avelar / Bloomberg News

 
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