Wall St gains as Intel rallies after earnings

Specialist Michael Pistillo, left, and trader Justin Flinn work on the floor of the New York Stock Exchange. File Photo / AP

Wall Street gained overnight as shares of Intel rallied on better-than-expected earnings, while the latest economic reports bolstered expectations the Federal Reserve won't be in a rush to raise interest rates.

In late afternoon trading in New York, the Dow Jones Industrial Average added 0.55 per cent, while the Standard & Poor's 500 Index gained 0.71 per cent, while the Nasdaq Composite Index climbed 0.86 per cent.

Gains in shares of Intel and those of Caterpillar, last up 4.7 per cent and 3.2 per cent respectively, led the Dow higher. Intel shares rose after the company reported its latest earnings.

Of the 36 companies in the S&P 500 that have reported so far, 81 per cent beat expectations, according to Reuters.

"The positive results from Intel and other companies have allowed the markets to breathe a sigh of relief since the reports haven't been a complete disaster," said Jeff Clark, a trading analyst at Stansberry Research in Baltimore, told Reuters.

At the same time, it seems that US policy makers might not raise interest rates as quickly as previously thought. Output at US factories rose 0.1 per cent in March, the first increase in four months, and following a 0.2 per cent decline in February, according to a Fed report.

Separately, the Fed Bank of New York said its index of manufacturing activity in New York contracted in April for the first time in four months.

And the latest Beige Book offered signs of muted expansion at 12 Fed districts.

"Demand for manufactured products was mixed during the current reporting period," the Fed said in its Beige Book. "Weakening activity was attributed in part to the strong dollar, falling oil prices, and the harsh winter weather."

The US dollar weakened after the data. The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, fell 0.4 per cent in afternoon trading in New York.

It's a good environment for US Treasuries too.

"The data right now is definitely not going to encourage the Fed to move faster, so yields may stay low until the data starts to improve," Thomas Simons, a government-debt economist in New York at Jefferies, one of the 22 primary dealers that deal with the Fed, told Bloomberg. "The generally expected tone was things were going to get better as we got better weather."

Shares of Exxon Mobil and those of Chevron rose, up 1.9 per cent and 1.6 per cent respectively, as oil advanced after a report showed US crude oil inventories rose less than expected last week.

"The smallish crude oil build and the drop in petrol inventories pushed prices up and also attracted some technical buying," Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut, told Reuters

Meanwhile, European Central Bank President Mario Draghi said the bank's bond-buying program will continue until there's sustained improvement in inflation.

"Purchases are intended to run until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below, but close to, 2 per cent over the medium term," Draghi said in remarks after an ECB meeting at which policy makers kept interest rates unchanged.

The Stoxx Europe 600 Index finished the day with a 0.6 per cent advance from the previous close. Germany's DAX eked out a 0.03 per cent gain, the UK's FTSE 100 Index rose 0.3 per cent, while France's CAC 40 Index climbed 0.7 per cent.