Wall St. rebounds from two-day drop; Fed minutes ahead

NEW YORK (Reuters) - U.S. stocks rose on Wednesday, rebounding from a sharp two-day slide after an early reading on earnings beat expectations.

Alcoa Inc was one of the S&P 500's biggest advancers, up 5.7 percent to $15.70 a day after the U.S. aluminum producer reported adjusted second-quarter earnings and revenue that topped Wall Street's forecasts.

While the former Dow component is no longer considered a market-moving industry bellwether, Alcoa is sometimes viewed as setting the tone for the season because it is one of the first high-profile names to report earnings.

Wells Fargo & Co , the largest U.S. mortgage lender, will report results on Friday. The earnings reports of dozens of closely watched companies, including Dow components, will be released next week.

The S&P 500 bounced back on Wednesday after its biggest two-day slump since mid-May, with small-cap and Internet names among the biggest decliners. With Wednesday's advance, the benchmark S&P 500 is about 0.8 percent away from a record close hit last week.

"The market was encouraged by Alcoa, especially since we were arguably oversold in the very short term," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.

The Dow Jones industrial average <.DJI> rose 45.53 points or 0.27 percent, to 16,952.15. The S&P 500 <.SPX> gained 5.61 points or 0.29 percent, to 1,969.32. The Nasdaq Composite <.IXIC> added 20.53 points or 0.47 percent, to 4,411.99.

The profits of S&P 500 companies are projected to grow 6.2 percent in the second quarter, according to Thomson Reuters data, down from the forecast of 8.4 percent at the start of April. Revenue is expected to rise 3 percent.

The expected growth is "not nothing, but it is nothing to get too excited about," Jeff Kleintop, chief market strategist at LPL Financial in Boston, wrote in a note to clients.

"The growth rate supports our outlook for high single-digit earnings growth in 2014 and further gains for U.S. stocks," Kleintop wrote. "But, despite the big show that is likely to be made over the U.S. earnings season in the coming weeks, it is not likely to be all that different from last quarter."

Investors awaited the release of minutes from the Federal Open Market Committee's June meeting at 2 p.m. The minutes will be scrutinized for insight into how soon the Federal Reserve might raise interest rates as June's strong jobs report has spurred speculation that a rate increase may come sooner than anticipated.

American Airlines Group shares climbed 3.9 percent to $41.82 on heavy volume. The company narrowed the range of its second-quarter unit revenue growth forecast, raising the low end and scaling back the high end compared with its previous forecast in June.

The shares of other airlines rallied after the revenue projection from American Airlines. Southwest Airlines Co shot up 1.5 percent to $27.09. Delta Air Lines Inc rose 1.2 percent to $36.88.

(Reporting by Angela Moon; Editing by Jan Paschal)

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