Stocks Swing to Gains on Earnings Reports

Strong earnings reports from Time Warner and Procter & Gamble helped U.S. stocks rebound Wednesday from two days of losses.

The market rallied even as oil prices climbed to the highest level since the record of $77.03 a barrel was set in mid-July.

In the bond market, Treasury yields continued to ease ahead of July employment data and ahead of the Federal Reserve’s meeting next week.

On Wall Street, the Dow Jones industrial average added 74.20 points, or 0.7%, to 11,199.93.

The Nasdaq composite climbed 16.82 points, or 0.8%, to 2,078.81, and the Standard & Poor’s 500 was up 7.63 points, or 0.6%, to 1,278.55.

Procter & Gamble, one of the 30 Dow stocks, jumped $2.36 to $58.29 after reporting a 36% rise in fiscal fourth-quarter earnings. Time Warner added 42 cents to $16.67 after saying it earned $1 billion in the quarter, compared with a loss a year earlier.

Winners topped losers by more than 2 to 1 on the New York Stock Exchange.

Stocks have been struggling to find their footing over the last month, as investors have weighed expectations for an end to rising interest rates against increasing signs of an economic slowdown.

Bullish analysts say that generally strong second-quarter earnings reports bolster the case for stocks, despite worries about the economy.

“Second-quarter earnings have looked fairly good,” said Robert Weissenstein, chief investment officer at Credit Suisse Holdings in New York.

But oil prices are rising again, which could deepen economic concerns. Near-term crude futures in New York jumped 90 cents to $75.81 a barrel, 1.6% below the July 14 record.

Energy prices were pushed up by supply concerns as Tropical Storm Chris headed toward the Gulf of Mexico. It may become the year’s first hurricane, the National Hurricane Center said.

A key test for stock and bond markets looms Friday, when the government reports July employment data. The report could play a big role in determining whether Fed policymakers, who meet Tuesday, will believe the economy is slowing enough to warrant a pause in their credit-tightening campaign.

The bond market appears convinced that the Fed will go on hold: The 10-year Treasury note yield dipped to 4.96% on Wednesday from 4.98% on Tuesday. The yield, now at a seven-week low, has fallen in five of the last six sessions.

Among the day’s market highlights:

* Shares of healthcare providers rallied after Cigna, the fourth-largest U.S. health insurer, reported better-than-expected earnings. Just last week the sector had been hammered by a weak report from Aetna.

Cigna surged $9.44 to $102.10, Humana rose $2.44 to $58.69 and Molina Healthcare was up $1.84 to $36. Aetna added $1.50 to $32.49.

* Adobe Systems helped to lift the tech sector after the software firm reiterated its June forecast for third-quarter sales of as much as $610 million and profit, excluding some items, of as much as 27 cents a share. Adobe rocketed $3.94 to $32.28.

Also in the tech sector, Apple Computer gained 98 cents to $68.16, Motorola rose 72 cents to $23.20 and Black Box jumped $3.38 to $42.62. But Google fell for the sixth time in seven sessions, losing $8.28 to $367.23.

* Gold mining stocks were mostly higher as metal rose $5.30 to $651.60 an ounce in New York. Goldcorp gained $1.02 to $30.89 and Newmont Mining was up 49 cents to $52.79.

Barrick Gold added 75 cents to $32.20. After regular trading ended the company said second-quarter profit soared to $459 million, or 53 cents a share, from $47 million, or 9 cents, a year earlier. The latest quarter includes results from Placer Dome, which Barrick bought in March.

* Lockheed Martin led an advance in the defense sector, climbing $1.16 to a record $81.55.

* Utility stocks were mixed after the Dow utility index hit an all-time high Tuesday. It eased fractionally Wednesday.

* Starbucks rose 34 cents to $33.30, but the stock tumbled after hours, following the coffee retailer’s quarterly earnings report. The company said profit rose 16% in the latest quarter, but its report that July same-store sales were up 4% -- the weakest growth for any month since 2001 -- sent the stock plunging to $30.25 after hours.