NEW YORK – U.S. stocks climbed Thursday as robust earnings from online marketplace eBay Inc. and chipmaker Advanced Micro Devices Inc. (AMD) revived optimism about corporate profits.
A stronger-than-expected profit from blue-chip Pfizer Inc. (PFE) drove the drug maker's stock up 4 percent to $24.97. Cost cuts helped Pfizer's results, and the stock was the biggest contributor to gains in the Standard & Poor's 500 index.
The Dow Jones industrial average was up 25.85 points, or 0.24 percent, at 10,880.71. The Standard & Poor's 500 Index was up 7.11 points, or 0.56 percent, at 1,285.04. The technology-laced Nasdaq Composite Index was up 22.17 points, or 0.97 percent, at 2,301.81.
"What we think occurred is that analysts became too euphoric about earnings expectations at some targeted companies and, unfortunately, they were the first ones to report," said John Augustine, chief investment strategist at Fifth Third Asset Management.
Shares of Walt Disney Co. (DIS) climbed, giving the Dow average its biggest boost, after the Wall Street Journal reported the entertainment company was in serious talks about acquiring Pixar Animation Studios (PIXR).
EBay (EBAY)surged 5.2 percent to $46.77 after a brokerage raised its investment rating, saying eBay was attractively valued and citing strong fourth-quarter results. EBay reversed an earlier decline after general weakness in tech shares that began Wednesday.
AMD, the No. 2 maker of computer processors, offered a bullish first-quarter outlook, sending several semiconductor shares sharply higher.
Shares of Disney rose 4.1 percent to $26.24 on the New York Stock Exchange, while Pixar shares jumped 2.8 percent to $58.87 on Nasdaq.
AMD shares surged 8.7 percent to $37.13. Other advancers among chip-related stocks were Nvidia Corp., up 5.6 percent at $45.07, and Altera Corp., up 3.5 percent at $19.76.
Shares of Lam Research Corp. surged 14.4 percent to $43.82 after several brokerage firms lifted their price target on the supplier of microchip equipment.
The Philadelphia Stock Exchange index of semiconductor stocks gained 3.1 percent, its biggest one-day percentage rise in more than two weeks.
Stocks also got a lift after the Philadelphia Federal Reserve Bank said its business activity index showed gains in new orders, a gauge of future growth, and an increase in the jobs component. The overall index, though, showed business activity slowed in January.
A report on Al Jazeera Arabic television that Usama bin Laden threatened attacks inside the United States caused the Dow average to turn negative briefly.
But the Dow quickly returned to positive territory and extended gains on optimism about earnings.
"We had the Al Qaeda statement, and a rise in gold and a little rise in oil. Usually those have been big headwinds for stocks," Augustine said. "So we are pleasantly surprised stocks are up in the face of that."
Merrill Lynch & Co., the biggest U.S. brokerage, said rising trading revenue helped its results and sent shares 3.5 percent higher to $72.05.
But other financial stocks posted mixed results. Wachovia, the No. 4 U.S. bank, posted an operating profit that only matched Wall Street expectations. Its shares fell 1.5 percent to $52.81.
North Fork Bancorp Inc., one of New York's largest banks, said profit fell, knocking its shares down 2.4 percent to $25.97.
Crude oil futures settled just above $67 dollars a barrel, helping shares of energy companies like blue-chip Exxon Mobil Corp. (XOM), up 1.4 percent to $61.50 and Chevron Corp., up 1.2 percent to $61.60.
Trading was heavy on the New York Stock Exchange where advancers beat decliners by about 5 to 2. About 1.79 billion shares were traded.
On Nasdaq, advancers outnumbered decliners by a ratio of about 9 to 4, with about 2.3 billion shares changing hands.