U.S. stocks ended stronger Wednesday as Visa's potential expansion into China and talk of a turnaround at McDonald's helped investors look beyond a mixed bag of quarterly earnings.
All of the 10 major S&P 500 sectors rose, with the tech index gaining 1.09 percent, propelled by Visa and MasterCard.
Visa (V) ended 4.1 percent higher at $68.01 after hitting a record high of $69.98, while MasterCard (MA) closed up 3.9 percent after China said it would open up its market to foreign firms for clearing domestic bank card transactions.
%VIRTUAL-pullquote-We're sorting through earnings. It's mixed, but there's no drastic change to the general economic recovery.%McDonald's (MCD) surged 3.1 percent after it said it was working on a plan to reverse its shrinking sales.
A week ago, more than 80 percent of the S&P 500 companies to have posted their March-quarter earnings had beaten estimates. But with 121 reports now in, that number has slipped to 71.9 percent -- just above the 70 percent earnings beat rate seen over the past four quarters. Many have blamed misses on revenue on a strong dollar for making their products more expensive overseas.
"We're sorting through earnings. It's mixed, but there's no drastic change to the general economic recovery." said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta.
Major Index Make Gains
The Dow Jones industrial average (^DJI) rose 88.68 points, or 0.49 percent, to end at 18,038.27. The Standard & Poor's 500 index (^GSPC) gained 10.67 points, or 0.51 percent, to 2,107.96 and the Nasdaq composite (^IXIC) added 21.07 points, or 0.42 percent, to 5,035.17.
The Nasdaq composite is now just 13 points shy of its record high close, set in March 2000, that signaled the limit of the dot-com bubble.
"I do think there are valuation concerns, and some tech companies are trading at extremely high multiples," said Derek Hoyt, chief investment officer at Minneapolis-based KDV Wealth Management, adding he doesn't believe valuations warrant a major selloff.
Beyond earnings, Wall Street remains motivated to invest in stocks due to the Federal Reserve's low interest-rate policy, he said.
Yum Brands (YUM) ended 4 percent higher after the restaurant operator said late Tuesday it was recovering from a meat scare in China and expected a strong year-end finish.
After the bell, eBay (EBAY) was up 4.3 percent after it posted March-quarter earnings above estimates and said its growth was hurt by the strong dollar.
On Wednesday, advancing issues outnumbered declining ones on the NYSE by 1,737 to 1,230, for a 1.41-to-1 ratio; on the Nasdaq, 1,483 issues rose and 1,267 fell for a 1.17-to-1 ratio favoring advancers.
The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq composite recorded 94 new highs and 33 new lows.
About 6 billion shares changed hands on U.S. exchanges, below the 6.2 billion daily average for the month to date, according to BATS Global Markets.
What to watch Thursday:
The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
At 10 a.m., the Commerce Department releases new home sales for March, and Freddie Mac releases weekly mortgage rates.
These selected companies are scheduled to release quarterly financial results:
Market Wrap: Stocks Up as Street Sees Beyond Mixed Earnings
I used to brunch with toddlers. We'd hold our kids tight while we waited in line, lest we lose them in the sea of waiting adults. We'd ply them with Cheerios while we waited for our food, try to prevent their eggs from hitting the floor, but inevitably, one of us would have to dart out to the sidewalk to avoid disturbing other patrons when a kid started crying.
Add onto all this stress the fact that many fellow restaurant patrons don't want to see us there, no matter how hard we work to keep our kids from disturbing them. And the huge tip we'd feel obligated to leave to compensate for the mess we left.
Finally one Sunday morning, it hit me that this was not easier than making eggs at home. Nope, it was just more stressful and expensive. If I wasn't enjoying a relaxing treat, why pay to dine out? Now we dine out with our kids only rarely, and when we do, it's likely to be at the least expensive restaurants (because those are the most kid-friendly ones). And we're not alone: Non-parents are more than twice as likely as parents to eat in upscale restaurants, according to a recent survey.
Hitting a bar or two with coworkers after work was a weekly ritual when my husband and I were childless professionals. I recently read a San Francisco bar review that noted the cocktails were "only" $10, and I realized that this habit, while fun, was probably one of the reasons my husband and I never had much left in the bank at the end of each pay period.
Nowadays, getting a sitter is too much work, no one wants to see our babies at bars, and we can't stay up until the clubs open -- so we enjoy our wine or cocktails at home, where we never have to tip the server.
When we were a childless couple, we once seriously underestimated how much tax to withhold from our paychecks, and when tax time came, we owed thousands. It was a momentary freak out, but it wasn't hard to pick up a few hours of overtime at work, and cut back on going out until it was paid.
With three kids to provide for, we know that we don't have the budget flexibility for an "oh, well" moment. We can't easily put in more work time because we are busy with the kids, and we have less fat in our budget to trim in an emergency. So we were forced to be frugal enough to build an emergency fund.
Ever hear about deeply indebted consumers who shop compulsively every day? That certainly wouldn't be me, even if I actually liked to shop. Between running Girl Scout meetings, cooking meals, school pick-ups and ice skating lessons, I'm lucky if I can get to the grocery store, much less a clothing store.
If it's true for my wardrobe, it's even more true for our house, which is full of outdated and scratched-up furniture -- not just because we don't have the extra money for a Pottery Barn splurge, but because we would never have the time to select new furniture anyway. Besides, this way we don't feel bad when one of the kids scrapes the coffee table with a pair of scissors or bleeds all over the old rug.
Like many mothers, I cut way back on my work time when my children were born. This, above all things, is why I got into frugality: I was on the lookout for ways to not have to leave the kids in order to earn more money. And I'm not alone in this desire: A Pew study found that fully a third of American parents feel they're not spending enough time with their children.
When having a baby (probably more than any other time in life), we suddenly need to acquire a lot of stuff we never owned before -- and that we will use for only a short time. All the clothes, shoes, tricycles and such are usually only good for a year or so.
I might have stopped by a thrift store now and then before having kids, but that sudden need for baby stuff is what got me into visiting consignment events, cruising Craigslist, joining Freecycle and actively seeking hand-me-downs from other families. Once you've tapped into the secondhand and sharing markets for kids' gear, it's only a short step to using the same resources to acquire things for yourself. My current bike -- my main means of transportation since we don't own a car -- came to me via Freecycle.
It's not just the cost of feeding, clothing, and housing children, or the worry about how we're not saving enough for college. It's sports. It's back-to-school shopping. It's pressure to throw the best birthday party. And the child care -- oh God, the child care.
Even if we try not to go crazy spending on all the above categories, raising kids is more expensive now than ever, and it forces us to be frugal in every other area of our lives.
In a recent survey, parents were 29 percent more likely than the childless to report getting fewer than six hours of sleep a night. This might explain why after work, childless friends might be out riding their new road bikes or taking cooking classes, but if I have a free two hours, my activity of choice is sleep. Sweet, free sleep.