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Stocks End Off Session Highs; Apple Hits $300

Stocks pared gains in the last half hour of the session but remained significantly higher Wednesday as the dollar slumped, gold soared, and a series of better-than-expected earnings reports gave investors confidence in the economy's health.

The Dow Jones Industrial Average rose 75.68 points, or 0.7 percent, to close at 11,096.08, a new five-month high. The Dow had risen as much as 134 points earlier in the session.

Cisco , Hewlett-Packard and Microsoft led the blue-chip index, while Intel and Bank of America fell.

The S&P 500 rose 8.33 points, or 0.7 percent, to close at 1,178.10, while the Nasdaq rose 23.31 points, or 1 percent, to close at 2,441.23. Both indexes also reached new five-month highs.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 19.

Most of the S&P 500 key sectors were higher, led by materials, industrials and energy, although telecom and financials slipped in the last half hour of trading.

The upbeat tone to the market came on the heels of better-than-expected earnings reports from Intel, CSX, and JPMorgan. Also playing a role are increased expectations that the Federal Reserve will step into to boost the economyafter the release of minutes from the central bank's September meeting.

"I know I was pretty cautious on earnings," said Jack Ablin, chief investment officer at Harris Private Bank. "I wanted to get into the market, but I was also a little bit concerned about how these earnings would play out."

The fact that earnings have started to come in better than estimates Ablin had considered too optimistic is a positive sign that gives investors a reason to buy.

"Stocks are cheap," Ablin added, especially with the prospect of another recession seeming less likely.

On the tech front, Microsoft shares rose after news on Wednesday that the company has expanded its search partnership with Facebook.

Intel slipped even after the tech giant released strong results, powered by demand from emerging markets and corporations. Analysts had mixed reviews: FBR raised its price target to $27 from $26, while S&P equity lowered its price target to $22 from $25.

Oracle and Microsoft advanced after Evercore Partners started coverage of the tech giants with an "equal-weight" and "overperform" ratings, respectively.

Shares of Apple topped $300 for the first time. The iPod maker's stock price had been trending higher ahead of its earnings release next week. In addition, the firm is scheduled to unveil the next version of its operating system at an event next week, CNBC reported Wednesday.

And for those keeping tab at home, Apple has the 4th highest share price in the S&P 500, followed by Google, Washington Post and Priceline .

Search engine giant Google rose, while chipmaker AMD fell ahead of their earnings due Thursday after the bell.

CSX continued to climb after reporting better-than-expected profits due to rising demand for freight.

Rival railroad stocks also rose, including Kansas City Southern , Union Pacific and Norfolk Southern . The Dow Jones Transportation Indexalso rose.

Costco shares were slightly higher despite a rating downgrade to "neutral" from "buy" from UBS. The brokerage said it continues to believe Costco has a strong business model, but after a 15 percent gain in the stock, it is fairly valued.

Wal-Mart, meanwhile, slipped after CEO Mike Duke said he expects higher sales in the fourth quarteras the discount retailer shifts back to an "everyday low price strategy." Duke spoke at Wal-Mart's annual meeting with analysts and investors.

Chevron fell slightly after the oil giant warned that its quarterly earnings could belower than those of its second quarter.

Western Refining surged almost 15 percent after Morgan Stanley upgraded the independent oil refiner to "outperform."

And elsewhere in energy news, Williams soared after the natural gas firm announced Alan Armstrong will become CEO at the end of the year after CEO Steve Malcolm retires.

Oil prices, rose for a third straight day near $83 a barrel as the dollar weakenedon reinforced expectations of more monetary easing by the U.S. central bank and on news that China's crude imports jumped in September. Gold surged to a record high near $1,375 an ouncewhile silver hit a 30-year peak.

The CRB index, the commodity price index, is at a 2-year high.

Financials slumped in the last half hour of trading, led by several regional banks. Keycorp was cut to "perform" from "outperform" by Oppenheimer.

Also, JPMorgan Chase slumped, despite kicking off earnings for the big banks with better-than-expected profits, helped by lower loan losses in its retail and credit card units.

Credit card companies surged following JPMorgan's earnings news. American Express , Visa and MasterCard all climbed 3 percent.

Investment management firms were also higher after several ratings upgrades. JPMorgan raised its price targets for Invesco , Eaton Vance , Federated Investors , Franklin Resources , Janus Capital , and T. Rowe Price .

Meanwhile, Standard Chartered fell sharply after the bank announced a rights issue.

Shares of St. Joe plunged almost 10 percent after Greenlight Capital hedge fund manager David Einhorn said the land developmenet company faces a number of challenges during a speech at the Value Investing Congress in New York. Einhorn has had a previously disclosed short position since 2006.

MGM Resorts also tumbled after disclosing that Tracinda, its largest shareholder, was reducing its stake in the casino company from 30 percent from 37 percent. Also weighing was the announcement that the firm would sell 41 million new shares in a secondary offering.

In mergers and acquisitions news, Lion's Gate Entertainment has proposed merging with Metro-Goldwyn-Mayer, which is in bankruptcy.

Volume on the consolidated New York Stock Exchange was 5.2 billion shares. On the NYSE floor, 1.3 billion shares changed hands, with advancers outpacing decliners about 4 to 1.

Meanwhile, the government auctioned $21 billion of 10-year notes, which had a yield of 2.475 percent and a bid-to-cover ratio of 2.99.

Auctions of 30-year bonds are expected on Thursday.

In the day's economic news, import prices declined, as a decline in oil prices offset gains in food and other goods, the U.S. Labor Department reported.

And mortgage applications for home refinancing loans rose for the first time in six weeks,although applications for new homes declined in the week ended Oct. 8, the Mortgage Bankers Association reported.

Coming Up This Week:
WEDNESDAY: Richmond Fed Pres Lacker speaks
THURSDAY: International trade; PPI; weekly jobless claims; oil inventories; 30-year bond auction; Minnesota Fed Pres Kocherlakota speaks; OPEC meeting; Earnings from Google and AMD
FRIDAY: Atlanta Fed Pres Lockhart speaks; Bernanke speaks; CPI; retail sales; Empire State mfg survey; consumer sentiment; credit card default rates reported; Earnings from GE and Mattel

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