US stock indexes gained amid earnings and economic data

U.S. stocks indexes jumped, putting to an end a two straight days of losses for the Standard & Poor’s 500 Index, as investors weighed corporate earnings and economic reports for clues on when the Federal Reserve may reduce stimulus measures.

The S&P 500 soared 0.3% to 1,690.25 at 4 p.m. in New York, after earlier falling as much as 0.4%. The Dow Jones Industrial Average added 13.37 points, or 0.1%, to 15,555.61. More than 6.4 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

“It seems like market participants on a day-to-day basis want to trade more on the prospect of what that means for the Fed’s tapering plan,” Jeff Layman, chief investment officer of BKD Wealth Advisors, said in a phone interview for Bloomberg. “I’d much rather see the market supported by positive underlying economic trend and real activity, rather than supported by the hope that the Fed will continue to artificially suppress the rate.” he added.

The S&P 500 completed its first two-day drop in a month yesterday, after climbing to within 3 points of 1,700, as housing and manufacturing data fueled speculation the Fed may reduce its asset-buying this year. Support from central banks and better-than-estimated corporate earnings have driven the S&P 500 up as much as 151% from its March 2009 low.

Better-than-expected results from International Paper Co. and Dow Chemical Co. boosted raw-materials producers to the best performance in the S&P 500. International Paper, the world’s largest maker of office paper, jumped 6.3% to $50.19. Dow Chemical rose 1.8% to $34.99 as stronger demand boosted its plastics unit.

Qualcomm Inc. climbed 3.3% to $63.42. The largest seller of semiconductors for mobile phones estimated that fiscal fourth-quarter sales may exceed analysts’ estimates, motivated by smartphone demand in emerging markets.

Caterpillar Inc. declined 1.6% to $82.14. The largest manufacturer of mining and construction machinery was cut to market perform, an equivalent of neutral, from outperform at BMO Capital Markets by equity analyst Joel Tiss. The company yesterday issued a forecast that missed analyst estimates.

Western Digital Corp. slid 5.9% to $63.53. The maker of hard drives forecast first-quarter adjusted earnings per share of $1.95 to $2.05, less than the average analyst estimate of $2.06.