Wall Street edges higher as Intel rebounds
NEW YORK (Reuters) - U.S. stocks rose on Wednesday, lifted by a rebound in tech shares following Intel's results, though financials limited gains as Bank of America sold off.
In a reversal of the morning's premarket action, BofA fell while Intel Corp rallied. It had been pressured a day after it cut its outlook, though it also reported a better-than-expected profit.
Financial shares were the weakest of the day, dropping 0.5 percent. Bank of America Corp lost 1.4 percent to $7.81 after swinging to a second-quarter profit that followed a massive mortgage-related charge a year earlier. It also posted a decline in revenue.
With the share decline, BofA breaks a streak of post-result rallies by such financials as JPMorgan Chase , Citigroup Inc and Goldman Sachs .
Intel late Tuesday cut its full-year revenue outlook, the latest tech name to warn on demand, but the shares rebounded 2.5 percent to $26 in early trading and lifted technology shares 1 percent.
"We're relatively stable today with a relief rally in Intel since people were worried the results would be much worse than what was delivered, though there are still some questions about financials, especially ones with a lot of derivative exposure like Bank of America," said Clark Yingst, chief market analyst at Joseph Gunnar & Co in New York.
With 7 percent of S&P 500 companies having reported thus far in the earnings season, 65 percent have beaten profit expectations, according to the latest Thomson Reuters data. Only 15 percent have missed.
Industrial shares also climbed, advancing 0.8 percent on the back of strong results at Honeywell Inc , which rose 6 percent to $57.79 as profits topped consensus views.
The Dow Jones industrial average was up 16.88 points, or 0.13 percent, at 12,822.42. The Standard & Poor's 500 Index was up 3.42 points, or 0.25 percent, at 1,367.09. The Nasdaq Composite Index was up 19.80 points, or 0.68 percent, at 2,929.84.
Investors also looked to Ben Bernanke, the U.S. Federal Reserve chairman, who will deliver the semi-annual "Monetary Policy Report to the Congress" before the House Financial Services Committee.
Bernanke testified before a Senate committee on Tuesday, and while he didn't give any specifics over what the central bank might do to accelerate growth amid signs of weakness, he left the door open to more stimulus if it became clear unemployment was not falling or if deflation risks mounted.
"There's a lot of speculation about policy shifts, possible quantitative easing, and that will drive markets both ways going forward," Yingst said.
In other company news, Vivus Inc surged 13 percent to $29.92 in premarket trading after the Food and Drug Administration approved the company's obesity drug.
Groundbreaking on new U.S. homes rose in June to its fastest pace in over three years, lending a helping hand to an economy that has shown worrisome signs of cooling.
Homebuilders rose on the data. Lennar Corp added 1.2 percent to $31.51 and D.R. Horton Inc was up 1.4 percent at $18.91.
(Editing by Dave Zimmerman)