Stocks advance amid optimism about fourth-quarter earnings

Stocks rose Wednesday for the first time in the week as investors seemed more optimistic on corporate earnings reports due out in the coming weeks.

The Dow Jones Industrial Average snapped a two-session losing streak by gaining 61.66 points to 13,390.51. The Nasdaq Composite Index rose 14.00 points to 3,105.81 and the S&P 500 Stock Index rose 3.87 points to 1,461.02.

In addition to earnings reports the markets will be watching the Thursday report on initial claims for jobless benefits which should provide a glimpse at the employment picture after the holiday season.

Commodities remained in a tight range. Gold dropped $6.70 to $1,655.50 an ounce and oil slipped five cents to $93.10 a barrel after a government report showed a big increase in crude reserves.

Alcoa Inc. (NYSE: AA), which reported better-than-estimated sales, fell 0.2 percent after rallying as much as 2.5 percent earlier Wednesday. Seagate Technology Plc (Nasdaq: STX) jumped 6.6 percent as revenue topped an earlier forecast. Herbalife Ltd. (NYSE: HLF) added 4.2 percent after Daniel Loeb’s Third Point LLC took an 8.2 percent stake in the company. Bank of America Corp. (NYSE: BAC) slid 4.6 percent after Credit Suisse Group AG (NYSE: CS) cut its recommendation for the lender.

“Alcoa’s report got us off to a good start,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Ill.-based Oakbrook Investments LLC. He spoke in a telephone interview. “Still, earnings growth is going to be a little bit harder to come by. If we see some good results from bellwether companies, that will definitely give a lift to the market.”

Fourth-quarter profits at S&P 500 companies probably increased 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.

Six out of 10 groups in the S&P 500 rose Wednesday as health- care and industrial shares had the biggest gains. Telephone and utility companies retreated the most. The Dow Jones Transportation Average climbed 1 percent to the highest level since July 2011. An S&P index of homebuilders advanced 0.9 percent to the highest since August 2007.

The Chicago Board Options Exchange Volatility Index rose 1.4 percent to 13.81. The index earlier touched 13.22, the lowest intraday level since 2007, and dropped 40 percent over the previous six days.

“People are just looking at these low levels as opportunity to buy portfolio protection,” Jonathan Krinsky, chief technical analyst at Miller Tabak & Co., said in an interview. “There were also a lot of eyes on it, and often times when that happens as an instrument breaks support levels, it reverses.”

MasterCard Inc. (NYSE: MA), the second-biggest U.S. payments network, increased 2.8 percent to a record $532.39 after Goldman Sachs Group Inc. (NYSE: GS) boosted the stock to buy from neutral.

Mattel Inc. (Nasdaq: MAT) climbed 3.1 percent to $36.81. The company was raised to buy from neutral at MKM Partners.

Boeing Co. (NYSE: BA) jumped 3.6 percent, the most in the Dow, to $76.76. Qatar Airways Ltd. said heightened scrutiny of the model after a plane caught fire at the Boston airport won’t damp the carrier’s purchase plans. Boeing shares tumbled 4.6 percent in the previous two days.

Clearwire Corp. (Nasdaq: CLWR) surged 7.2 percent to $3.13. The company agreed to be bought out by Sprint Nextel Corp. (NYSE: S) last month for $2.97 a share received an unsolicited offer from Dish Network Corp. (Nasdaq: DISH) at a price that’s 11 percent higher. Sprint fell 1.5 percent to $5.88 while Dish rose 2.5 percent to $36.85.

NuVasive Inc. (Nasdaq: NUVA) jumped 11 percent to $17.46. The company forecast 2013 sales that would beat analyst estimates.

Apollo Group Inc. (Nasdaq: APOL) lost 7.8 percent to $19.32 as net income slid on a drop in new enrollment. Competition for students has increased as more traditional universities have begun offering online courses that were once dominated by for-profit colleges. Apollo and its for- profit college competitors have faced scrutiny the past few years from state attorneys general and the U.S. government over their recruiting practices.

Separately, Morgan Stanley downgraded the stock to equal weight, similar to a neutral rating, from overweight.