NEW YORK – Stocks rallied on Wednesday as a stronger-than-expected profit from aerospace company Boeing Co. (BA) and a sharp drop in crude oil prices overshadowed Google Inc.'s (GOOG) first earnings shortfall as a public company.
Shares of Boeing, a Dow component, climbed 4.9 percent to $71.62 on the New York Stock Exchange, in the biggest one-day percentage gain in seven months.
Wednesday's gains showed Wall Street's resilience from Tuesday, when all three major U.S. stock indexes fell after the Federal Reserve hinted more interest-rate hikes might be needed.
"The Boeing stock was out of favor for a long time. I think people are still kind of searching for stocks that may have been undiscovered and overlooked, and Boeing is one of them," said Mike Driscoll, listed trader at Bear Stearns.
The Dow Jones industrial average was up 89.09 points, or 0.82 percent, at 10,953.95. The Standard & Poor's 500 Index was up 2.38 points, or 0.19 percent, at 1,282.46. The Nasdaq Composite Index was up 4.74 points, or 0.21 percent, at 2,310.56.
Boeing fueled most of the Dow's advance and was the second-biggest contributor to the S&P 500's gain.
News that the U.S. Patent and Trademark Office had sided with BlackBerry portable e-mail device maker Research in Motion Ltd. (RIMM) in a finding involving its patent battle with NTP Inc., helped the Nasdaq turn positive and offset the drag spawned by Google.
The U.S.-traded shares of Research in Motion, also known as RIM, jumped 9 percent, or $6.08, to $73.61 on Nasdaq. The company's stock ranked as the second-biggest gainer in the Nasdaq 100.
Google shares, which had not been tainted by an earnings miss since the Web search company went public in August 2004, slid 7.1 percent, or $30.88, to close at $401.78 on Nasdaq.
For most of the trading session, Google's weight had kept the lid on any Nasdaq advance, a day after the company reported a profit shortfall.
"Google's situation is really one of a (baseball) player who's been batting 500, who's only batting 400 and the market was expecting 500," said Charles Lieberman, chief investment officer of Advisors Capital Management.
"Google is a company that's doing extraordinarily well. It just didn't live up to very, very high expectations."
Google said after the bell on Tuesday that a higher-than-expected tax rate caused it to miss the consensus forecast. The stock registered its biggest one-day percentage drop since going public in 2004.
Still, analysts' views on Google were mixed in the wake of its earnings miss. UBS cut its rating on Google to "neutral" from "buy," while Credit Suisse raised its price target on the stock to $500.
The shares of drug maker Amgen (AMGN) -- up 4.5 percent, or $3.30, at $76.19 -- gave both the Nasdaq and the S&P 500 their biggest lifts. During the session, Amgen soared as high as $80.03.
The catalyst for Amgen's advance was an announcement by Roche Holding AG indicating that the Swiss drug maker would not attempt to launch a rival product to Amgen's big-selling anti-anemia drug for cancer patients as soon as investors had expected.
On the economic data front, a report showed continued growth in U.S. manufacturing, but it was not so strong as to revive worries about inflation. That data also lent support to the overall market.
The Institute for Supply Management said its index of U.S. manufacturing activity fell to 54.8 in January from December's upwardly revised reading of 55.6.
On the other hand, the ISM prices-paid component, deemed an inflation measure, rose to 65.0 in January from 63.0 in December, while the employment index fell to 51.3 from 53.6, showing that job creation at factories is still on the rise but at a bit slower pace.
In other earnings news, Time Warner Inc. (TWX), the world's largest media company, posted a higher fourth-quarter profit on Wednesday, beating analysts' forecasts.
Time Warner shares rose 3.9 percent, or 69 cents, to $18.22 on the NYSE.
Volatility in U.S. oil futures prices marked Wednesday's session on the New York Mercantile Exchange.
After jumping by more than $1 at one stage on Wednesday afternoon to a session high at $69 a barrel, U.S. crude for March delivery fell $1.36 to settle at $66.56.
Weekly U.S. government data showing rising crude, gasoline and heating oil inventories helped drive crude futures prices lower, as well as the desire to take profits, traders said. Those factors offset mounting concerns about Iran's nuclear dispute and short-term forecasts for colder temperatures in the United States, which had driven oil prices higher earlier in the day.
Trading was heavy on the NYSE, with about 1.92 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 2.30 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of about 9 to 7 on the NYSE and by about 8 to 7 on the Nasdaq.