Dow Closes at 6-Year High; Stocks Higher as Strong Earnings Beat Inflation Fears

Stocks ended higher on Wednesday, with the Dow industrials hitting a 6-year high, buoyed by stronger-than-expected earnings from companies such as top brewer Anheuser-Busch Cos. (BUD) and a key broker's dropping its "sell" rating on General Motors (GM) Corp.

The Dow Jones industrial average ended up 71.24 points, or 0.63 percent, at 11,354.49, its highest close since January 19, 2000. The Standard & Poor's 500 Index closed up 3.67 points, or 0.28 percent, at 1,305.41. The Nasdaq Composite Index finished up 3.33 points, or 0.14 percent, at 2,333.63.

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The latest string of results in a stronger-than-forecast earnings season overshadowed investors' worries about rising interest rates after orders in March for durable goods such as airplanes and refrigerators surpassed expectations.

Anheuser-Busch reported stronger-than-expected earnings, sending its shares up 5.3 percent, or $2.27, to $44.90 on the New York Stock Exchange.

Top U.S. brokerage Merrill Lynch & Co. (MER) upgraded General Motors Corp. to "neutral," saying it sees early signs of a turnaround, and making GM the Dow's top gainer as it rose 7.9 percent, or $1.70, to $23.11. .

"The consensus going into the quarter was that earnings were going to (rise) somewhere north of 10 percent and they have handily beat expectations," said Joe Liro, an economist and market strategist with Stone & McCarthy Research Associates, who pinned the rising markets on Wednesday on the flow of positive earnings news.

Government data showed orders for durable goods — manufactured items meant to last three years or more — surged in March, reviving worries the Federal Reserve would continue to raise rates into the second half of the year to cool a sizzling economy and ward off inflationary pressures.

Stocks also extended Wednesday's upward swing after a report showed a 13.8 percent jump in new home sales in March, which far exceeded expectations.

The Dow Jones index of home builders' stocks rose 1.6 percent. That mirrored gains in stocks such as Toll Brothers Inc. (TOL), up 1.1 percent, or 36 cents, at $33.30.

Weakness in biotech shares limited the Nasdaq's gains.

Shares of Gilead Sciences (GILD) Inc., a biopharmaceutical company whose drugs include HIV virus and bird flu treatments, fell 6.7 percent, or $4.11, to $57.31.

Analysts said there was concern that Gilead's royalties for flu drug Tamiflu for the year may not meet expectations.

Shares of AT&T Inc. (T) and BellSouth Corp. (BLS), which own Cingular Wireless, and Verizon Communications, which owns Verizon Wireless with Vodafone Group Plc (VOD.L), all rose and helped lead the S&P 500 higher on Wednesday after Sprint Nextel Corp., the No. 3 U.S. wireless service, reported results below expectations and fed concerns it is losing market share to its bigger rivals.

AT&T rose 2.2 percent, or 56 cents, to $26.16, while BellSouth was up 2.1 percent, or 69 cents, at $33.74. Shares of Verizon rose 1.8 percent, or 58 cents, to $33.08. All are traded on the NYSE.

While the broader stock market appears to be taking the spike in bond yields in stride, one group is taking it on the chin: utilities. The S&P 500's utilities index is down by about 1 percent for a second straight day and is now the second-worst performer, behind health care, in the index for the year.

Utilities pay the largest dividend yields over any other stock market sector and become less appealing when bond yields rise and become more competitive.

The 10-year U.S. Treasury note's yield hit 5.13 percent during the day — its highest in about four years. Late in the day, the 10-year note's yield was 5.11 percent, up from 5.07 percent on Tuesday, while its price was down 9/32 late Wednesday at 95-11/32.

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