Wall Street managed a modest advance Wednesday as investors concentrated on solid second-quarter earnings and shrugged off higher oil prices and a drop in petroleum reserves.
Investors were anticipating more good earnings news after Harley-Davidson Inc. and Abbott Laboratories released strong quarterly results.
“Earnings are very good, corporations are flush with cash and we’re seeing more dividend increases occurring,” said Joe Lisanti, editor of Standard & Poor’s weekly newsletter The Outlook. “We’re going to see more investors pleased with their returns.”
Stocks briefly gave up some early gains after the Energy Department reported that crude oil and gasoline supplies declined again last week. Some production in the Gulf of Mexico was disrupted due to Tropical Storm Cindy and Hurricane Dennis.
A barrel of light crude closed at $60.01, down 61 cents, on the New York Mercantile Exchange.
The Dow Jones industrial average rose 43.50, or 0.41 percent, to 10,557.39.
Broader stock indicators also advanced. The Standard & Poor’s 500 rose 1.08, or 0.09 percent, to 1,223.29 and the Nasdaq composite index rose 0.96, or 0.04 percent, to 2,144.11.
Bonds fell, with the yield on the 10-year Treasury note rising to 4.16 percent from 4.14 percent late Tuesday. The dollar fell against the euro, while gold prices were unchanged.
Stocks had opened higher on news that the U.S. trade deficit improved slightly in May, although most of the gains reflected a temporary decline in world oil prices. The trade deficit fell by 2.7 percent in May to $55.3 billion, the best showing since March, the Commerce Department reported.
Although stocks closed up, they continue to trade in a narrow range because “this is the very beginning of earnings reporting season. It’s not surprising, given the flat market we’ve had, that people want to wait and see how the first earnings reports look before they commit dollars,” said Susan L. Malley, chief investment officer for Malley Associates Capital Management.
A handful of companies reported after the close of regular trading.
Yum Brands Inc., operator of KFC and Taco Bell fast food chains, beat analyst estimates but lowered third- and fourth-quarter guidance. Advanced Micro Devices Inc. beat analyst estimates, although its second-quarter earnings fell 65 percent from a year ago, and Apple Computer Inc. also beat forecasts, reporting the highest revenue and earnings in its history. Apple shipped 616 percent more iPods than it had a year earlier and 35 percent more Macintosh computers.
Yum fell 67 cents in after-hours trading after slipping 55 cents to $51.71 in regular trading. AMD rose 54 cents in the extended session after losing 12 cents and closing at $19.25 in the regular session. And Apple picked up 21 cents after hours, following an 11-cent gain to $38.35 in regular trading.
Health care products maker Abbott Laboratories fell $2.06 to $47.65 after the company’s guidance for the third quarter came in below analysts’ expectations.
Hospital operator HCA Inc.’s stock fell $4.86, or 8.83 percent, to $50.05 after it said second-quarter earnings, excluding special items, will fall below analysts expectations.
Stock in Boston Scientific Corp. fell 38 cents to $27.48 after The Wall Street Journal reported doctors are seeing continued injuries during the implantation of the company’s cardiac stents. Problems with the stents have caused three deaths even after the devices’ 2004 recall, the paper reported.
Motorcycle maker Harley-Davidson said second-quarter profits declined 4 percent from last year, as lower motorcycle shipments outweighed a modest rise in revenue. But the results beat Wall Street expectations, and the company also raised its full-year earnings growth target. Harley rose 68 cents to $50.38.
Gannett Co., the nation’s largest newspaper publisher, posted a slight decline in second-quarter earnings on lower broadcasting revenues and higher costs for interest and new presses at The Detroit News. The result matched the average estimate from analysts surveyed by Thomson Financial and its stock fell 46 cents to $72.95.
Declining issues led advancers by nearly 8 to 7 on the New York Stock Exchange, where preliminary consolidated volume came to 1.82 billion shares, down from 1.94 billion on Tuesday.
The Russell 2000 index of smaller companies fell 3.14, or 0.47 percent, to 667.65.
Overseas, Japan’s Nikkei stock average was down 0.28 percent. In Europe, Britain’s FTSE 100 closed up 0.55 percent, France’s CAC-40 was up 0.69 percent for the session, and Germany’s DAX index was up 0.58 percent in late trading.