Market rallies as Dow components report solid earnings

NEW YORK -- The news sent the Dow up 256.80 points, or 2.08%, to 12,619.27. In the broader market, the Standard & Poor's 500 index rose 30.28, or 2.27%, to 1,364.71, and the Nasdaq composite index rose 64.07, or 2.80%, to 2,350.11.

The battered financial sector advanced after JPMorgan reported profit fell 50% because of tight credit markets, but still beat analysts' expectations. The nation's third-biggest bank, which is in the process of acquiring ailing Bear Stearns Cos., reported $2.6 billion of write-downs tied to its loan portfolio.

"You have a combination of JPMorgan and all these other strong earnings out there from a broad range sectors, and that's helping the buying we're seeing," said Todd Salamone, director of trading and vice president of research at Schaeffer's Investment Research. "There's an unwinding of all the negativity that we saw ahead of the earnings season."

Salamone and other analysts have been hoping that strength in corporate earnings would act as a catalyst for a significant rally; the market has managed a choppy ascent since hitting lows in early March. Investors have been growing more confident in recent weeks that the Federal Reserve's efforts to boost the economy and the troubled credit markets are working. Wednesday's earnings reports bolstered that sentiment.

The Dow is up more than 800 points from a low near 11,740, reached March 10.

In addition to earnings reports, Wall Street weighed sluggish economic reports on inflation and housing that were mostly within expectations. The Federal Reserve also released its beige book report, which said the economy is weakening amid a softening labor market.