Stocks closed higher Wednesday, with techs rallying ahead of key earnings from Apple and Amazon.
The tech-heavy Nasdaq gained 1.2 percent to finish at 2405.21, outperforming the Dow Jones Industrial Average and S&P 500 index, which each gained 0.3 percent. The Dow closed at 12763.22, while the S&P ended at 1379.93.
"Those stocks at a 52-week low are outperforming," Richard Cripps, managing director of portfolio strategy at Stifel, Nicolaus Capital Markets, told CNBC, which "gives us confidence that this market has probably seen a low." Still, he said, "We don’t clutch into higher gear until we probably get into a drop in the commodities markets."
Crude oil settled at $118.30 a barrel after pushing $120 on Tuesday. Crude supplies rose by 2.4 million barrels last week, more than the 1.2-million-barrel increase expected, the EIA reported earlier.
David Lutz, managing director for equity trading at Stifel Nicolaus Capital Markets in Baltimore, said a lot of the market action today was more short covering than bargain hunting.
After negative earnings out of financials -- including Ambac reporting writedowns that were great than its market cap -- "we've seen a slow, steady clawing back" in the market, Lutz said. "A tremendous amount of that was short covering in the tech sector -- particularly in semis."
Still, Lutz said, "The way the market is shrugging off some larger macro issues ... it's amazing how resilient the market has been."
Apple rose 1.7 percent in regular trading. After the closing bell, the iPhone and iPod maker blew past earnings and sales expectations, sending the stock higher in after-hours trading. Earnings came in at $1.16 a share on sales of $7.51 billion. Analysts had expected a profit of $1.07 a share on sales of $6.964 billion, according to Thomson Financial.
Despite the solid earnings, Apple, known for its conservative forecasts, issued a disappointing outlook for the current quarter.
A day earlier, American Technology Research downgraded its rating on Apple, citing high expectations that have bumped the stock up 40 percent in the past month.
Amazon shares climbed 1.8 percent in regular trading. After the bell, the online marketplace beat its earnings target and raised its 2008 sales outlookbut said operating income and profit margins, would be lower than previously expected. Shares fell more than 3 percent in extended trading.
Ambac shares skidded 43 percent, pressuring both the Dow and S&P, amid concerns about the bond insurer's outlook after it reported a loss of $1.66 billion, or $11.69 a share. Excluding certain items, the loss was $6.93 per share, more than three times the expected loss, as the company wrote down $1.73 billion for missed payments on complex investments backed by home loans.
Boeing landed the top-gainer spot on the Dow, rising 4.5 percent, after a solid quarterly report from the jet maker. The aerospace giant reported its profit rose 38 percent, more than expected, driven by strong demand for commercial jets, and backed its full-year forecast of $5.70 to $5.85 a share.
Safeco shares jumped 46 percent after Liberty Mutual agreed to buy the property and casualty insurer for $6.2 billion. The deal would make diversified insurer Liberty the fifth largest U.S. property and casualty insurer.
Another day, another IPO.
American Water Works dropped 4.2 percent in its debut on the New York Stock Exchange under the ticker symbol "AWK." Late Tuesday, 58 million shares were priced at $21.50. Both the number of shares and offering price were lower than expected. The IPO had already been delayed once, in November, due to weak market conditions.
That was a stark contrast to Tuesday's IPO of fertilizer company Intrepid Potash , which soared 58 percent on its first day on the Big Board. The company raised $960 million with its initial public offering, priced late Monday at $32 a share. The stock trades as "IPI."
Commercial airlines issued dismal quarterly reports.
Deltareported a loss far worse than expected, citing soaring fuel costs. Delta is preparing to merge with Northwest Airlines, which also posted a larger loss than expected.
Internet portal -- and Microsoft target -- Yahoo reported a profit after the bell Tuesday that edged past expectations but analysts said it was unlikely to cause to Microsoft to raise its offer of $31 a share.
On Wednesday, Microsoft CEO Steve Ballmer said the software giant was prepared to walk away from its $44-billion deal with Yahooif the two couldn't agree on a price.
"We're prepared to move forward without a merger with Yahoo," Ballmer said, speaking at a tech conference near Milan, Italy. "We think the best way to move forward quickly [and gain critical mass against Google] is to come together with Yahoo ... Hopefully that works. But if it doesn't, we go forward," he said. "Time is money. We made (that) clear in the last letter we sent."
UPS , widely seen as a gauge of the economy, reported its profit rose 7.5 percent, in line with expectations, but lowered its forecast. The company said gains from its international business boosted the current quarter's results but it doesn't expect the U.S. economy to strengthen in the second quarter.
Yum Brands shares advanced 4.7 percent after the company, which operates the KFC, Taco Bell and Pizza Hut fast-food chains, beat earnings expectations and raised slightly its full-year outlook amid strong growth from China.
More troubles appeared for the housing industry, as an industry group reported a sharp drop in mortgage applications in the face of rising interest rates. This reversed February's reading, which some analysts had interpreted as signaling and end to the decline in the housing market.
Shares of Pulte Homes and Ryland Group skidded ahead of the homebuilders' earnings, due out after the bell; analysts expect per-share losses of 77 cents and 84 cents, respectively.
Ryland's loss came in at 69 cents a share amid fewer sales, lower margins and higher selling and other costs.
Still to Come:
THURSDAY: Jobless claims; durable-goods orders; new-home sales; Earnings from Aetna,
Bristol-Myers, ConocoPhillips, Motorola, Pepsi, American Express and Microsoft
FRIDAY: Consumer sentiment; earnings from Ericsson, Honda
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