NEW YORK – Investors put their interest rate worries on hold and sent stocks higher Wednesday after strong earnings reports from Time Warner Inc. (TWX) and Procter & Gamble Co. (PG) restored some of the market's flagging confidence.
The Dow Jones industrial average rose 74.20, or 0.67 percent, to 11,199.93.
Broader stock indicators also moved higher. The Standard & Poor's 500 index climbed 7.63, or 0.6 percent, to 1,278.55, and the Nasdaq composite index gained 16.82, or 0.82 percent, to 2,078.81.
Time Warner's $1 billion profit, compared to a loss a year ago, exceeded the market's expectations and gave hope to investors disappointed with the media sector's recent performance. A strong showing from P&G, the consumer products company, assuaged fears of a drop in consumer spending.
Yet with a tropical storm threatening Florida and energy usage soaring in the sweltering eastern United States, rising energy prices threatened to stall the market's momentum for the rest of the week. A barrel of light crude settled at $75.81, up 90 cents, on the New York Mercantile Exchange, while prices for natural gas — widely used in electricity generation — are sharply higher this week.
Nonetheless, investors sought bargains after two days of selling, pressing ahead despite the Labor Department's jobs report coming Friday and the Federal Reserve's latest decision on interest rates, due next week.
"It's probably wrong to expect much more from the stock market than this when you still have these questions about the Fed that are unanswered," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "We have the employment numbers on Friday which will help us with some answers, but for today, this is nice, but uninspiring."
Bonds also moved higher after two days of sideways trading, with the yield on the benchmark 10-year Treasury note falling to 4.96 percent from 4.98 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Most analysts believed the day's stock runup would be short-lived, given the fact that the monthly job's report has been increasingly difficult to predict — as has the Fed's intentions toward interest rates. Tropical Storm Chris, expected to strengthen into a hurricane as it heads for the oil-rich Gulf of Mexico, could also come into play toward the end of the week.
"If you see that storm head into the gulf, all bets are off," said Bill Groenveld, head trader for vFinance Investments. "You're going to see oil spike higher than it is now, and that'll take things right back down."
For now, however, earnings news dominated Wall Street's thinking. Time Warner added 42 cents to $16.67 after posting strong revenue gains in its telecommunications divisions, though most of its media holdings posted tepid results. The conglomerate also announced a revamp of its America Online division, in which it will now provide most of its services for free.
Procter & Gamble saw its quarterly profit climb 36 percent on higher revenues from price increases. P&G, which beat analysts' expectations by a penny per share, gained $2.36, or 4.2 percent, to $58.29.
Adobe Systems Inc. (ADBE) helped the lagging tech sector after the software company reaffirmed its third-quarter profit forecasts, prompting a number of positive analyst comments. Adobe surged $3.94, or 14 percent, to $32.28.
Ford Motor Co. (F) rose 38 cents, or 5.8 percent, to $6.96 after The Wall Street Journal reported the company has launched a strategic review of ailing business units that could lead to a sale of those divisions or broader strategic alliances with other automakers. The review is headed by a former investment banker who specializes in mergers and acquisitions.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where preliminary consolidated volume came to 2.73 billion shares, compared with 2.55 billion traded Tuesday.
The Russell 2000 index of smaller companies was up 6.92, or 1 percent, at 696.81.
Overseas, Japan's Nikkei stock average rose 0.15 percent, though markets in Hong Kong and Bombay fared better. In Europe, Britain's FTSE 100 was up 0.87 percent, France's CAC-40 climbed 1.58 percent for the session, and Germany's DAX index gained 1.5 percent.