Stocks Rally Amid Strong Earnings

Stocks rallied Wednesday as better-than-expected profit reports pointed to a strong third-quarter earnings period and crude oil prices ended the day lower.

The Dow Jones industrial average (search) was up 80 points, or 0.78 percent, at 10,365.15. The Standard & Poor's 500 Index (search) was up 11.66 points, or 0.99 percent, at 1,189.80. The technology-laced Nasdaq Composite Index (search) was up 23.68 points, or 1.15 percent, at 2,079.68.

United Technologies Corp. (UTX) climbed 3.5 percent to $51.72 and was the biggest positive influence on the blue-chip Dow average. The industrial conglomerate, which makes Carrier air conditioners and Otis elevators, Tuesday reported an increase in quarterly profit and raised its full-year outlook.

Motorola Inc. (MOT), the world's No. 2 mobile phone maker, said late Tuesday that its third-quarter earnings rose on strong sales of its mobile phones, beating Wall Street estimates. Motorola shares climbed 4.4 percent to $21.06.

Cleveland Fed President Sandra Pianalto (search), who is not a voting member of the Fed's policy-setting committee this year, said higher energy prices did indeed risk spilling into core inflation. But she said inflation should still slow next year, provided the Fed does its job. Pianalto was one of four Fed officials speaking about the U.S. economy.

The Federal Reserve's "beige book (search)" report showed business activity increased across the country in September and early October.

"I think that fears of inflation are overblown, and that when we consider energy prices have pulled back a bit, there doesn't seem to be a lot of evidence that inflation has propagated in the economy beyond energy," said Edward Keon, chief investment strategist at Prudential Equity Group.

U.S. crude oil for November delivery fell 79 cents to settle at $62.41 a barrel after a report showed crude oil inventories rose more than expected.

"At the same time, the earnings season so far has been terrific ... the overall pattern suggests you're getting very strong growth and that we'll probably do better than 15 percent, about double the historical average over the last 60 years," Keon said.

Dow component JP Morgan Chase & Co. (JPM), the third-largest U.S. banking company, said its quarterly earnings rose and its revenue topped Wall Street forecasts. . JP Morgan's shares rose 2.3 percent to $34.56 on the New York Stock Exchange.

After the closing bell, eBay Inc. (EBAY), the largest Web auctioneer, is scheduled to report results. Shares of eBay were up 3.2 percent at $41.71, helping to lift the Nasdaq.