Wall Street closes higher, adding to gains

A choppy day on Wall Street ended with more gains for stocks Wednesday, as investors welcomed another batch of encouraging profit reports from U.S. companies.

The S&P 500 rose 0.6 percent, tacking more onto its big gains from a day earlier, when the benchmark index soared 2.8 percent, its best day in weeks.

The Dow Jones Industrial Average managed a modest 0.2 percent gain after recovering from a midafternoon pullback. The Nasdaq composite climbed 1.6 percent.

With the latest move higher the major indexes are on pace for a solid weekly gains.

“It’s not exactly the most robust day, but it’s nice to follow up on a day like yesterday,” said Ross Mayfield, investment strategist at Baird. “It feels like over the past couple of months good days have given it all back the very next day.”

Profit reporting season is ramping up, with more types of industries offering details about how high inflation and worries about a possible recession are affecting their customers. A lot is riding on whether they can continue to deliver healthy earnings.

Stocks tumbled roughly 20 percent from their highs this year because of rising interest rates, and proof that profits can remain strong would provide a big support for markets. On the other hand, warnings about upcoming weakness could kick off another leg downward.

For now, traders appear to be encouraged by what they’re hearing from companies, especially big banks, as the reporting season gets going.

“It wasn’t universal, but the broad takeaway from the big banks earlier is the consumer is doing alright, the data has confirmed that,“Mayfield said.

Companies so far have been mostly topping profit expectations this reporting season, as is usually the case, though the most recent reports were mixed.

Nasdaq, the company behind its namesake trading exchange, jumped 6.1 percent after delivering stronger profit and revenue than Wall Street expected. Omnicon Group, the advertising and public-relations company, rose 3.9 percent following better-than-expected earnings. Comerica, the Dallas-based financial services company, added 1.6 percent after it also reported stronger-than-expected results.

Netflix climbed 7.4 percent higher after it said it lost fewer subscribers during the spring than expected. It, though, remains the worst stock in the S&P 500 for the year, down by nearly two thirds.

Beyond Netflix, several other tech-oriented companies made strong gains. Amazon climbed 3.9 percent, and Nvidia jumped 4.8 percent, which helped boost the tech-heavy Nasdaq composite index.